NASDR Weighs in On Battle for Customer Accounts

The NASDR weighed in yesterday on the never-ending battle for client accounts. The self-regulatory unit will put out for comment an interpretation of its existing rules that would prohibit "any member firm from taking any action that interferes with a customer's right to transfer his or her account," the NASDR said in a press release. The new rule interpretation will be published either in the NASDR's

The NASDR weighed in yesterday on the never-ending battle for client accounts. The self-regulatory unit will put out for comment an interpretation of its existing rules that would prohibit "any member firm from taking any action that interferes with a customer's right to transfer his or her account," the NASDR said in a press release.

The new rule interpretation will be published either in the NASDR's next Notice to Members or as a separate communication, said Nancy Condon, an NASDR spokesperson. There is no word yet on when the comment period will begin and end.

When firms sue brokers who join a competitor, the suing firm typically asks for a “nonaccept” clause in the injunction to prohibit customers from leaving. Such clauses block the receiving firm from accepting ACATS.

Enjoining client accounts has been met with controversy and sparked customer complaints; the interpretation is designed to minimize impacts on clients from employment disputes.

The news release contains strong language from NASD CEO and President Robert Glauber, who is quoted as saying: “Customers should have the freedom to choose the registered representative and the securities firm that service their brokerage accounts."

Editor's note: For any comments regarding this article, or to suggest a story idea for RR Online or Registered Representative magazine, contact Editor in Chief Dan Jamieson at [email protected], Online Editor Rick Weinberg at [email protected], Online Managing Editor Cheryl Cooper at [email protected] or Senior Editor Michael Hayes at [email protected]

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