Supervisory Requirements Under NASD Notice to Members 12-03 Relating to Complex Products

The heightened supervision of complex products:

  • The preapproval of the products after the exercise of reasonable due diligence and research,
    assessing the product for customer suitability.
  • Post-approval review to monitor the product for their performance for purposes of a continuing,
    ongoing suitability assessment.
  • Training of Registered Representatives to assure their knowledge of such products, as well as their
    suitability parameters.
  • Ongoing considerations of a customer’s financial sophistication and understanding of the risks of
    these products.
  • Giving due consideration as to whether or not a less complex or costly product could achieve the
    same objectives for the customer.

NASD Notice to Members 12-03 is
an all-encompassing directive designed to protect the investing public from newly-introduced and
unconventional complex products that have been introduced to the financial markets over the past several

We offer a free consultation to investors who feel they have been improperly-sold complex products.

The Law Offices of Timothy J. O’Connor is one of the only law firms practicing securities law in the
Tri-City Capital District of Albany, Schenectady and Troy. We also represent victimized investors
throughout the rest of New York State, including Buffalo, Binghamton, Syracuse, Watertown, Utica,
Kingston, New York City/Manhattan, Long Island, and everywhere in between, as well as in the
surrounding states of Massachusetts, Vermont, New Hampshire, Connecticut, and New Jersey.

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