Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, February 22, 2007

NASD Investor Education Foundation Announces New Grants and Guidelines

NASD's Investor Education Foundation announced its guidelines for its next round of grants to further investor education and also announced recent recipients of grants.  Behavioral finance, the retirement income security of older Americans and new marketing and distribution channels for investor education will be the main areas of focus for the NASD Investor Education Foundation's 2007 General Grant Program.

To provide greater flexibility for applicants, the 2007 General Grant Program will have two cycles. In the first cycle, applicants submitting proposals postmarked on or before Monday, February 26, will be notified of grant decisions in July. For the second cycle, proposals must be submitted on or before Friday, August 10, and notifications will be made in late December. The NASD Foundation's grant programs are open to non-profit organizations, including public and private colleges and universities.

"Most of us assume that individuals consider all available information when making decisions, especially financial decisions," said NASD Foundation Chairman Mary L. Schapiro, who also serves as NASD's Chairman and CEO. "But there's a growing body of evidence that that's not always true - that social, emotional and other influences lead people to make unwise economic and investment decisions that affect their financial security. We want to pursue research in the area of 'behavioral finance' so we can better understand how those biases affect financial decision-making, and develop investor education materials and strategies that can overcome those biases."

The NASD Foundation's 2007 grant program priorities also recognize the increasing importance of educating older Americans about managing their finances in retirement, given that the retirement population will swell to an unprecedented 70 million or more individuals, many of whom will have to manage assets accumulated in 401(k)s and other defined contribution plans. Another priority area focuses on new and effective ways to market and distribute investor education so that large numbers of Americans receive the help they need.

Among the grants awarded was was Guide to Dispute Resolution for the Small Investor - $153,725 to Pace University Law School in White Plains, NY, to develop and distribute an educational guide to help small, individual investors understand their legal rights and responsibilities in order to avoid disputes, or seek resolution through arbitration or mediation in the event of a dispute.  (In the interests of full disclosure, this blogger was formerly associated with Pace, but had no involvement in the grant process.)

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