The Securities and Exchange Commission should sharpen its oversight of the National Association of Securities Dealers, a report for Congress released today says.

The NASD is a privately financed, self-regulatory organization that is meant to police member firms and persons who trade securities not sold on stock exchanges.

The report by the General Accounting Office, the congressional watchdog agency, was requested by Rep. John E. Moss (D-Calif.), chairman of the House Interstate and Foreign Commerce Subcommittee on Over sight and Investigation.

The NASD has some 2,800 member firms, and about 191,260 individuals are registered with the associations. Some 445 NASD members are directly involved in monitoring the finances and operations of member firms around the country.

The GAO found that the NASD lacked "a sufficient number of adequately trained examiners."

The report criticizes the SEC for its "informal approach to inspection oversight."

The GAO recommends that the commission:

Develop guidelines to determine the adequacy of the NASD's examiner staff.

Improve inspection planning.

Eliminate delays in processing complaints.

According to the GAO report, the NASD conducted 2,032 routine examinations and 402 special examinations last year. The NASD suspended 5 firms and 62 individuals, and it expelled 18 firms and barred 113 individuals. It also collected $212,300 in fines the report said.