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SECURITIES DEALERS PRESSURING BANKS TO KEEP LOGOS OFF INVESTMENT MATERIAL

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Aiming to reduce customer confusion about mutual funds sold by banks, the National Association of Securities Dealers is pressuring banks to stop using their own logos on brochures touting investments.

Keeping a bank's logo off the brochures will make it clearer to customers that the investments they buy at branches are different than federally insured bank accounts or certificates of deposits, NASD believes.NASD began sending notices to bank-owned brokerages and other members last month, warning them to keep their parent's logos off promotional material. For example, if a bank uses a symbol, such as a stagecoach, it cannot put it on a brochure advertising the products offered by its brokerage unit, said Jim Spellman, a NASD spokesman.

They also cannot put the bank's own name on the brochure except in conjunction with giving the location of the branch, or wherever the investment is sold.

Bank groups are up in arms about the move, saying that it's like telling Prudential that it can't use a rock in its advertisements.

All NASD members are subject to the same rule, said a NASD spokesman. But the group, a self-regulating body that sets professional standards for brokers, has singled out bank-run brokers lately in the wake of complaints by seniors groups, bank customers and lawmakers about their mutual fund sales practices.

Some banks have been accused of misleading customers about the risks of mutual funds and not adaquately disclosing that the funds are not federally insured like regular bank accounts.

The notices are the first step in a series of moves by the NASD to regulate bank brokerages. Around Dec. 15 NASD will seek comments on a proposed set of rules that would cover all bank-owned brok-erages and govern how they can sell mutual funds.

Most banks sell mutual funds through a third party or through a separate, bank-owned company established to sell investment services. Both set up offices in branches.

Banks have rushed into the business because mutual funds - pools of professionally managed money invested in stocks or bonds - are a popular way for Americans to invest. Nearly 15 percent of all mutual funds are sold through banks.

Some banks offer funds with names that are nearly identical to the bank's name. And often the brokerage affiliate has the same name as the bank, such as Chemical Banking Corp.'s Chemical Investment Service Corp.

People could mistake an advertisement for investments with other bank products if the logo is on the form, NASD believes.

"Our rules say no confusion can be created about the names or who offers the product," said Spellman.

Some customers of NationsBank Corp. have sued, saying they were not informed they were buying risky mutual funds.

Lawyers representing customers contending they were duped by their bankers applauded NASD's moves on bank logos, saying it protects consumers.

"This is long overdue," said Jonathan Alpert, a Tampa, Fla.-based attorney representing customers and former employees of Nations-Banks and First Union Corp.

But bankers say it will hinder their marketing efforts and raise costs.

"If you're going to tell Chase Manhattan that it can't use its logo on brochures, why not tell Prudential and Fidelity," said James D. McLaughlin, director of agency relations for the American Bankers Association.