Series 28: Chapter Six: The Uniform Practice Code

Chapter Six

The Uniform Practice Code

Before the NASD came into being in 1939, the informal over-the-counter market was difficult to track. The audit trail of OTC securities transactions frequently disappeared in a confusion of undocumented phone calls and handshake agreements. The national exchanges had been operating for years under a set of delivery rules and listing requirements, but the OTC was so unstructured that there was frequent disagreement as to the actual terms of a transaction. One of NASD’s first assignments was to develop a Uniform Practice Code to govern the OTC market, which it dutifully prepared and put into effect in August 1941.

The Unifor