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NASD Rule 2790

What is 'NASD Rule 2790'

A ruling passed by the National Association of Dealers (NASD), a self-regulating organization, prohibiting certain individuals from performing trades in hot-issue Initial Public Offering (IPO) equity. The rule was enacted in March of 2004, and is designed to help make the IPO market more equitable for all traders and dealers involved.

Explaining 'NASD Rule 2790'

NASD Rule 2790 ensures that members of the NASD cannot purchase IPO equity at the cost of another investor, sell IPO equity for anything other than the offering price, and cannot trade IPO equity for personal gains.

Rule 2790 specifies that certain members of the NASD, others related to NASD members by business or relation, and other restricted persons may not trade IPO equity that would be at the cost of another investor. However, there are always exemptions to the rule.


Further Reading


May foreign benefits plans invest in new issues under FINRA Rules 5130 and 5131
www.emerald.com [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

NASD publishes initial proposal to change conflict of interest rules relating to underwriting of public offerings in the United StatesNASD publishes initial proposal to change conflict of interest rules relating to underwriting of public offerings in the United States
www.emerald.com [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

NASD regulation of IPO conflicts of interest-does gatekeeping workNASD regulation of IPO conflicts of interest-does gatekeeping work
heinonline.org [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

Sinners or Saints? Top Underwriters, Venture Capitalists, and IPO UnderpricingSinners or Saints? Top Underwriters, Venture Capitalists, and IPO Underpricing
papers.ssrn.com [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

FINRA IPO Allocation Rule; investment funds must now consider complianceFINRA IPO Allocation Rule; investment funds must now consider compliance
www.emerald.com [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

The continuing need for broker-dealer professionalism in IPOsThe continuing need for broker-dealer professionalism in IPOs
heinonline.org [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

The law and economics of IPO favoritism and regulatory spinThe law and economics of IPO favoritism and regulatory spin
heinonline.org [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

Spinning and Underpricing-A Legal and Economic Analysis of the Preferential Allocation of Shares in Initial Public OfferingsSpinning and Underpricing-A Legal and Economic Analysis of the Preferential Allocation of Shares in Initial Public Offerings
heinonline.org [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …

SEC approves amendment to FINRA IPO allocation rule 5131, easing compliance for fund investorsSEC approves amendment to FINRA IPO allocation rule 5131, easing compliance for fund investors
www.emerald.com [PDF]
… CAPITAL MARKETS HANDBOOK income capital markets. Active in industry affairs, he chaired both SIA's Syndicate and NASD's Corporate Financing committees and the SIA, New York District … [C] FINRA and SEC Provisions … 5-54 Rule 144—Sale of Unregistered Securities …