NYSE OKs Broker-Customer Correspondence Rules
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The New York Stock Exchange’s board voted Thursday to exempt brokers’ letters and e-mail to and from customers from prior review by member firms.
The exemption, among guidelines approved for supervision of brokers’ communications with their customers, is designed to protect investors without hindering the growing use of electronic communications.
“We want to ensure that as technology speeds communication between firms and their customers, regulation continues to protect customers but does not unduly hinder the flow of information,” said Edward Kwalwasser, group executive vice president of the Big Board.
Right now, the NYSE requires member firms to review brokers’ correspondence with their customers. Under the rules approved Thursday, firms would no longer be required to review each piece of mail, including e-mail.
Brokerage firms would still have to approve other kinds of communications between brokers and their customers, such as advertisements, market letters, sales literature and research reports, before they were sent.
The proposal is expected to be filed soon with the Securities and Exchange Commission for review, the NYSE said.
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