The NASD is proposing to broaden its ban on sales contests to include all contests that award brokers cash for selling a particular security or type of security in preference to another.

The proposal would remove any cash or non-cash incentive to sell specific securities or a particular type of securities. It would not affect compensation based on a broker’s total production across all types of securities, it said.

Previously NASD prohibited contests that awarded non-cash prizes (cruises, concert tickets) to encourage the sale of one kind of mutual fund, variable annuity, or certain other securities in preference to others. The new rule extends the prohibition to cash as well as non-cash prizes and to all forms of securities.

“A broker’s first responsibility is to recommend securities that are right for the investor. Sales contests, whether they pay off in cash or cruises, that favor particular securities can interfere with that responsibility,” said Robert Glauber, chairman and CEO of NASD. “This rule proposal would eliminate, in a clear and complete way, this potential conflict of interest.”