How Your Program Can Avoid Red Flags
What types of incentive meetings are acceptable under the rules? For many planners whose companies are affected by the NASD rules on incentive meetings, the path to compliance isn't exactly clear-cut. We ran a few examples by Larry Kosciulek, associate director of NASD, to get his take on whether they'd pass muster.
A U.K.-based insurance company with offices and independent salespeople in the U.S. wants to hold a training meeting near its London offices for U.S. representatives. Is this an acceptable location?
It could be, says Kosciulek, but be careful. “We never said that a foreign location is inappropriate, but it would send up a red flag. The problem is it's pretty difficult not to offer a lot of additional (non-work-related) activities when you're halfway around the world. People would naturally want to do something other than training.”
As long as meetings are held somewhere near the office of the member sponsoring the meeting, the rules are liberal regarding locations, he acknowledges. But planners must keep training the focus of the events. “It can't be a trip to the beach,” he warns.
The rules let the meeting sponsor pay for the attendee's lodging, transport, and meals. OK if they spring for the spouse's room and board too?
Absolutely not, says Kosciulek. Companies affected by the NASD rules cannot pay for the expenses of a spouse or any other guest of meeting attendees.
ABC Insurance has planned its training meeting. Mornings are devoted to education, afternoons to recreation. OK by the rules?
No. A full work day of training is the NASD requirement, says Kosciulek, noting that the organization has “intercepted” some meetings called to their attention which had too many sideline activities on the agenda. Planners were asked to either modify or cease their plans.
Many of Company X's brokers enjoy time on the fairway. Can the company offer golf as a leisure activity during a training meeting?
Yes. Golf can be a part of the agenda, but only if the attendees pay for it themselves and it is not offered during the business day. Kosciulek notes that the NASD understands that manyend up being held at resort properties because they have the size and appropriate facilities for such events, and that attendees would naturally want to enjoy the amenities. “But they have to do so after-hours,” he says.