NASDR Weighs in On Battle for Customer AccountsNASDR 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
May 8, 2001
Rosalyn Retkwa, Contributing Writer
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."
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