Invest Financial Corp. said Friday that it is in formal talks with the National Association of Securities Dealers regarding its supervisory procedures from 1995 through November 1997.
The Tampa-based firm, which provides brokerage and investment services to 125 financial institutions, said the discussions began about a month ago and should conclude by late November.
The NASD is a government-chartered self-regulatory group that, among other things, polices broker-dealers. It wields several enforcement tools, including the ability to levy fines, suspend brokers' licenses, and censure individuals and firms.
Robert R. Blagojevich, Invest's chairman and chief executive officer since July, said the issues under discussion arose during an examination that the NASD concluded last November.
He said the talks are "confined to supervisory activities," a category that he said takes in trading activity, investor suitability, and review of client activity. He said Invest is cooperating with the NASD.
The NASD declined to comment on the talks. Alden Adkins, general counsel of NASD Regulation, said member firms are subject to the NASD's rule on supervisory obligations. Its essence is that firms must maintain "a set of written procedures that tell who's responsible for supervising each area, and what it is they're going to do to perform that supervision," he said.
Since the NASD exam ended, Invest has revamped its compliance activities, Mr. Blagojevich said. Steps it has taken include hiring a new chief compliance officer, revising written procedures for monitoring field representatives, and adding supervisors.