NASD: Improving Investor Protection

Sponsor: The NASD Investor Education Foundation (NASD)

The NASD Investor Education Foundation invites eligible organizations to submit competitive grant proposals for research and/or education projects that protect retail investors from fraud. Applicants are encouraged to establish partnerships that combine research and technical expertise with the ability to influence large audiences through highly credible communications vehicles and networks. Successful proposals might, for example,

- quantify the incidence of investment fraud in the United States, disaggregated by types of fraud and victim characteristics
- identify the characteristics of investment fraud perpetrators or victims
- uncover the mechanics of investment fraud and tactics used to deceive or pressure investors
- analyze why investors respond to scams and how they behave when confronted with financial loss
- help US investors recognize potential investment scams, including scams related to microcap stocks
- develop and test investor protection communications strategies that are effective in raising defenses against fraud
- improve awareness among organizations (e.g. community groups and their leaders) about affinity fraud and the unwitting role that such organizations sometimes play in scams
- encourage individuals to take precautions against fraud
- increase the reporting of investment fraud to public authorities

Project deliverables may include any combination of research reports, published papers and articles, communications tools, and turnkey programs. For education projects, applicants are encouraged to devise cost-effective ways of evaluating their efforts. Research proposals must have practical outcomes for individual investors, regulators, and nonprofit organizations active in the field of personal finance.

Applicants are encouraged to read the Investor Fraud Study prepared by The Consumer Fraud Research Group with NASD Foundation support.

Priorities

Of particular interest to the Foundation are projects that

- reach a large, but precisely defined, audience through multiple communications channels
- are well grounded in research
- have measurable objectives and reliable methods for evaluating outcomes
- avoid duplication of existing initiatives and research
- are sustainable beyond the grant term

The following are not a priority for the Foundation for this RFP:

- projects that do not address the needs of retail investors
- projects that do not focus on investor protection
- projects that lack a strong marketing and distribution component

Amount: There is no set minimum or maximum grant amount. In considering grant requests, the merits of the proposed work are the primary focus. In 2006, grants ranged from $153,725 to $629,310; the average grant award was $421,031. Proposal budgets are carefully scrutinized for compliance with the grant guidelines and justification for the efficient use of funds. Funding is provided in installments contingent upon achieving established project milestones.

Deadline: June 11, 2007

For further information, please visit: http://www.nasdfoundation.org/investor_protection07.asp