NASD Investor Education Foundation Calls For Research Aimed At Improving Information Disclosed To Investors

In an effort to make financial product information more meaningful and more accessible to investors, the NASD Investor Education Foundation today called upon non-profit groups, colleges and universities to submit grant proposals for research projects that examine the type of information, level of detail and method of distribution that would most benefit investors. Grant proposals must be submitted by Aug. 26, 2005. The Foundation anticipates awarding multiple grants of $100,000 or more. Grant recipients will be announced in the first quarter of 2006.

"This NASD Investor Education Foundation grant program will initiate important research that will provide the industry with new and improved ways of explaining financial product information clearly, accurately and effectively," said Robert R. Glauber, Chairman & CEO of NASD, who also serves as Chairman of the NASD Investor Education Foundation. "The Foundation is searching for competitive proposals that will significantly improve the current disclosure regime, because we believe information is a crucial tool for protecting investors."

Successful projects will include an assessment of the current securities disclosure methodology, with project deliverables such as a research paper meriting publication in professional journals and a presentation to professionals involved in the development of securities regulations. Reports must offer conclusions and recommendations for making disclosure more effective for the benefit and protection of investors.

Of particular interest to the Foundation is research that address one or more of the following questions:
What type of information and degree of detail do investors consider essential to make informed investment decisions?
When is disclosure most effectively delivered?
What modes of delivery are most effective at reaching individual investors?
What are the best ways to enhance investor retention of material information?
What trends exist in the type of material information being disclosed, and are these trends constructive?
How can disclosure to investors be improved in such areas as equities, bonds and margin?
How does the reliance on, and need for, material information vary according to the distribution channel (for example, direct-sold versus broker-sold)?
Would more standardization of financial product disclosure help investors better understand the similarities and differences among financial products?
Does the amount of information disclosed dilute the value of the most material information? If so, what is the right level of disclosure?

The NASD Investor Education Foundation, established in 2003, supports educational programs and research with the goal of providing investors with high-quality, easily accessible information and tools to better understand investing and the markets. The Foundation recently awarded more than $1 million in total to 11 organizations for new educational programs and research projects targeting the underserved segments of the population. The Foundation's grant initiatives complement NASD's own investor education efforts. For details about grant programs, applications, and other new initiatives of the Foundation, visit www.nasdfoundation.org.

NASD is the leading private-sector provider of financial regulatory services, dedicated to investor protection and market integrity through effective and efficient regulation. NASD believes that understanding should precede investing - and that education is often the best form of investor protection. NASD's broad range of investor education programs include Investor Alerts, brochures and online resource guides on such critical topics as mutual fund class shares and 401(k) and college savings plans. This information is distributed through its Web site, www.nasd.com, printed materials and Investor Forums.