Day-Trading Rules For New Clients Only

Proposed rules to make day-trading firms screen clients and disclose the risks of their fast-paced trading style would apply only to new customers or accounts, over the objections of state securities regulators.

“Why should existing day-trading clients not be afforded the same risk disclosure and protection as new clients?” asked Marc Beauchamp, a spokesman for the North American Securities Administrators Assn., a state regulators’ group. “Some existing clients could be day-trading unaware of the real risks involved.”

The National Assn. of Securities Dealers, in the latest version of its plan, rejected efforts by the state regulators’ group to extend the day-trading restrictions to clients with current accounts. The NASD said some day-trading firms argued “that it would be difficult to review all existing accounts to determine which accounts should be classified as day-trading accounts.”

The rules still must be approved by the Securities and Exchange Commission.