Dear NASD Member:
Re: INSITE Workshops and Technical Forums on New Rule 3150 For Compliance and Technical Staff of Clearing and Carrying Firms.
NASD Regulation, Inc. will implement substantial changes to its member examination program beginning in the third quarter of 2001. These changes are the culmination of two years of effort involving both staff and industry
representatives. This new business process, called INSITE1, uses technology to focus our regulatory oversight activities on potentially high-risk areas.
Examiners will conduct member examinations using INSITE technology that will focus the examination on risk areas associated with each firm's business profile. The net result will be more effective examinations that use members' and regulatory resources more efficiently.
NSITE also introduces a new surveillance system which establishes a rigorous process to measure and monitor a wide range of broker/dealer activities. The surveillance system will draw on data contained in existing NASD Regulation databases, and from data supplied by members either directly or through their clearing firms or service providers. Using sophisticated statistical analytic software, the INSITE Surveillance system will identify both changes in the pattern of member activity and member
patterns that are distinctly different from their peers. The objective is to focus firm and examiner attention on areas where change is occurring in member activities resulting in the potential for heightened regulatory risk.
As noted above, some of the data that will be monitored in INSITE exists at the member firms, or their clearing firms, or service providers. To facilitate this analysis, NASD Regulation is promulgating Rule 3150, which will require carrying firms to electronically report certain data on behalf of the correspondent clients and all self-clearing firms to report this data on their own businesses. The text of the Rule can be found on www.nasdr.com> members check here > INSITE. The technical specifications associated
with filing the required information electronically with NASD Regulation is also available on this area of the NASD Regulation Web Site.
NASD Regulation will hold workshops in five major cities to further explain the concepts of the new INSITE system and to provide a forum for NASD members and their service providers to discuss the requirements of the Rule. There will be two identical workshop sessions held in each of the
cities, during which NASD Regulation and technical staff will be available. Please consult the following list for the dates and locations.
To register for an INSITE workshop please send an e-mail to: insite.ifdf@nasd.com indicating the city and session (Session I or II) you wish to attend. (Note: As of June 1, the workshop presentation will be available on the INSITE Web Page.) Please also provide your name, firm name, and contact information when registering. Due to space
considerations firms will be limited to no more than two workshop participants, and registration will be on a first-come, first-served basis. Your participation in the workshops will be confirmed by return e-mail. For questions on the INSITE workshops, please call Elizabeth Wollin at (240)386-5156 or send an e-mail to insite.ifdf@nasd.com
Sincerely,
Mary Alice Brophy
Executive Vice President
NASD Regulation |
