3/20/2006 SEC Approves Independent Testing Rule Changes for NASD Members
The SEC has approved rule changes to NASD Rule 3011, the rule requiring NASD members develop and implement AML programs. The changes specify the frequency for conducting independent tests (generally annually), provide what independence means when a tester is in-house, include a quarterly review and update requirement regarding the designated compliance officer, and a requirement that the AML officer be an “associated person.” (See the NASD website at www.nasd.com/web/groups/rules_regs/documents/notice_to_members/nasdw_015967.pd <http://www.nasd.com/web/groups/rules_regs/documents/notice_to_members/nasdw_015967.pd>). The “associated person” requirement caused confusion because of the initial assumption that the NASD was requiring that the officer be an employee of the firm for which he was responsible. The NASD has indicated, however, that the officer could be employed by the member’s parent or an affiliate.
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