Securities Dealers Inc. is taking stock of whether its suitability rules should apply to customers of on-line brokerages.

Though the NASD has not brought any case to date, on-line transactions are a gray area because whether a broker recommendation was made depends on the "facts and circumstances," said Alden S. Adkins, senior vice president and general counsel at the regulator. "We haven't closed our books yet," he told group of more than 300 regulators, enforcement and compliance officers, and lawyers at NASD's fall securities conference here.

Elisse B. Walter, executive vice president and chief operating officer of the NASD's regulatory unit , said the changing market environment "really tests the current regulatory structure in terms of whether changes will have to be made."

The NASD suitability rule, which requires brokers to determine that their recommendations are appropriate for a customer, have come under scrutiny as more investors trade securities on-line. The umbrella group for state securities regulators, for example, is holding a roundtable discussion next month on whether the rule should be amended to specifically cover on-line trading. By contrast, the NASD's "know your customer" rule explicitly requires brokers to determine essential facts about an investor such as income, objective, and assets -- regardless of whether a trade occurs on-line -- Mr. Adkins said in an interview.

Another area addressed during an open question-and-answer session with NASD officials was a recent suggestion by Securities and Exchange Commission Chairman Arthur Levitt Jr. to create a single regulatory organization to govern the various stock markets.

"We think conceptually it's a good idea," Ms. Walter said. She said a single regulatory body would create "greater efficiencies, less duplication" and would have "complete knowledge of what's going on."

The NASD is considering how to combine regulatory functions it has in common with its counterpart at the American Stock Exchange, said Derek W. Linden, senior vice president of the NASD's public disclosure department. But having one regulator for all the markets is not without opponents, including the New York Stock Exchange, and Ms. Walter said she is not sure about a timetable for the project.

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