Opinion ID: 287861
Heading Depth: 2
Heading Rank: 2

Heading: Standing of the National Association of Securities Dealers

Text: 91 The NASD claims standing to seek judicial review under 80a-42(a) of the Investment Company Act, which accords a right of review to 'any person or party aggrieved by an order issued by the Commission   .' 15 U.S.C. 80a-42(a). It relies principally on the case of F.C.C. v. Sanders Bros. Radio Station, 309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 869 (1940), to support its standing to sue as a private attorney general to vindicate the public interest in the proper enforcement of the Investment Company Act. This standing issue is settled by Sanders. There is no requirement that a plaintiff establish a legally protected private interest to sue under 'party aggrieved' statutes. Office of Communication of United Church of Christ v. F.C.C., 123 U.S.App.D.C. at 335, 359 F.2d at 1001. The only question is whether the NASD is aggrieved by the Commission's orders granting the exemptions from the Act to the Bank. 92 The NASD represents about 3,700 registered brokers or securities dealers. Most of its members sell shares in mutual funds to investors and are compensated by sales commissions from the 'load' charged by the funds. The Bank's commingled investment Account and similar bank-sponsored funds sure to follow 22 are an addition to the group of 'no-load' funds whose shares are not sold at a commission by NASD members. No one denies that bank-sponsored collective investment funds will provide substantial competition to both 'load' and 'no-load' mutual funds. Limitation of sale of participations to customers with a minimum of $10,000 to invest does not narrow the area of competitive overlap enough to make probable injury insubstantial. Surveys indicate that individual sales of $10,000 or more have accounted for about half the mutual fund industry's total dollar sales. 23 NASD members stand to lose commissions earned from the cream of the business. This is enough to show that they are aggrieved parties under 80a-42(a). 93 It is clear, moreover, that the NASD is aggrieved as a result of the Commission's orders. Analysis of the legal problems in establishing the Account in conformity with the banking laws confirms the Bank's concession that without the exemptions, it would be 'effectively precluded' from operating the Account. Both conditions of standing to sue under the aggrieved party provision are met. 94 For these reasons, I join in the decision of the court. 95