Facts on stock brokers and how to stay on top of your money: GLOSSARY OF USEFUL TERMS

(A complete glossary of terms is available from the NASD.)

Answer - A respondent's written reply to a claim.

Arbitration/Counsel or Arbitration Administrator - The person at the sponsoring organization who handles administrative matters in arbitration proceedings.

Answer - A respondent's written reply to a claim.

Arbitrator - A person chosen to decide disputes between parties.

Award - The written determination of the arbitrators.

Broker - An individual or firm who acts as an intermediary between a buyer and seller, who usually charges a commission.

Broker/Dealer - NASD member firms that act as securities dealers or brokers, or perform both functions.

Claim - A demand for money or other relief.

Claimant - A person making a claim.

Compliance Departments - Departments set up in all organized stock markets to oversee market activity and make sure that trading complies with the Securities and Exchange Commission and other Exchange regulations.

Confirmation - Formal memorandum from a broker to a client giving details of securities transaction. When a broker acts as a dealer, the confirmation must disclose that fact to a customer.

Counsel - An attorney who advises and represents a party in an arbitration.

Counterclaim - A claim against the claimant.

Cross-Claim - A claim by a respondent against a co-respondent previously named by the claimant.

Customer Agreement – New Account Information Form

Excessive Trading - A broker excessively trades an account for the purpose of increasing his or her commissions, rather than to further the customer's investment goals.

Filing - Delivery to the Director of Arbitration of the statement of claim or other pleadings, to be kept on file as a matter of record and reference.

Panel - The arbitrators who decide a dispute.

Party - A person or broker/dealer making or responding to a claim in an arbitration proceeding.

Pleadings - The claim, answer, counterclaim, and/or third-party claim and/or cross-claim filed in an arbitration.

Respondent - The person against whom a claim is made.

Service - Delivery of the Statement of Claim or other pleadings to those parties named in the arbitration.

SRO - A self-regulatory organization. For the purposes of this pamphlet, an SRO is a securities association or securities exchange.

Third-Party Claim - A claim by the respondent against a party not already named in the proceeding.