Notice to Members 96-25
SEC Approves NASD Manual Revisions
Published Date:
Publication Scheduled For May
Executive Summary
In mid-January, the Securities and Exchange Commission (SEC) approved a revised NASD Manual. To facilitate your adjustment to this new Manual, which is scheduled for publication and dissemination this May, we have included a Guide to the Manual: New-to-Old Conversion Chart and Old-to-New Conversion Chart. This material outlines the reorganized Manual and indicates where the relocated material appeared in the old Manual.
Please direct your questions or concerns about these changes to T. Grant Callery, Vice President and General Counsel, Office of the General Counsel, at (202) 728-8285, or Joan C. Conley, Corporate Secretary, at (202) 728-8381.
| March 4, 1996 | ||
| GUIDE TO THE MANUAL (OLD-TO-NEW CONVERSION CHART) | ||
| Existing Provision | Proposed Rule No. | |
| SCHEDULES TO THE BY-LAWS | ||
| Schedule A | Unchanged | |
| Schedule B | Unchanged | |
| Schedule C | 1000 | |
| I. | Applications for Membership | 1010 |
| II. | Registration of Principals | 1020 |
| Registration on Registered Options Principals | IM-1022-1 | |
| Explanation on Limited Principal - General Securities Sales Supervisor | IM-1022-2 | |
| III. | Registration of Representatives | 1030 |
| IV. | Registration of Assistant Representatives-Order Processing | 1040 |
| V. | [Reserved] | |
| VI. | Persons Exempt from Registration | 1060 |
| VII. | Qualification Examinations and Waiver of Requirements | 1070 |
| VIII. | Confidentiality of Examinations | 1080 |
| IX. | Foreign Members | 1090 |
| X. | Foreign Associates | 1100 |
| Resolution on Filing of Misleading Information as to Membership or Registration | IM-1000-1 | |
| Resolution on Status of Sole Proprietors and Registered Representatives Serving in the Armed Forces | IM-1000-2 | |
| Resolution on Failure to Register Personnel | IM-1000-3 | |
| Explanation on Appointment of Executive Representatives | IM-1000-4 | |
| XI. | Registration of Government Securities Principals and Representatives | 1100 |
| XII. | Continuing Education Requirements | 1120 |
| Schedule D | ||
| Part I | ||
| Definitions | 4200 | |
| Part II | ||
| Qualification Requirements for Nasdaq Stock Market Securities | 4300 | |
| 1. | Domestic and Canadian Securities | 4310 |
| 2. | Non-Canadian Foreign Securities and ADRS | 4320 |
| 3. | Suspension or Termination of Inclusion of a Security and Exceptions to Inclusion Criteria | 4330 |
| 4. | Use of The Nasdaq Stock Market on a Test Basis | 4110 |
| 5. | Trading Halts | 4120 |
| Policy on Voting Rights | IM-4310 | |
| Disclosure of Material Information | IM-4120 | |
| Part III | ||
| Designation of Nasdaq National Market Securities | 4400 | |
| Introduction | 4400 | |
| 1. | Applications for Designation | 4410 |
| 2. | Quantitative Designation Criteria | 4420 |
| 3. | Limited Partnership Rollup Designation Criteria | 4430 |
| 4. | Registration Standard | 4440 |
| 5. | Quantitative Maintenance Criteria | 4450 |
| 6. | Non-Quantitative Designation Criteria for Issuers Excepting Limited Partnerships | 4460 |
| 7. | Non-Quantitative Designation Criteria for Issuers that are Limited Partnerships | 4470 |
| 8. | Termination Procedures | 4480 |
| Policy on Voting Rights | IM-4120 | |
| Part IV | ||
| Listing Fees | 4500 | |
| A. | Nasdaq National Market - Entry Fee | 4510(a) |
| B. | Additional Shares | 4510(b) |
| C. | Annual Fee - Domestic and Foreign Issues | 4510(c) |
| D. | Annual Fee - American Depository Receipts (ADRs) | 4510(d) |
| E. | The Nasdaq Smallcap Market - Entry Fee | 4520(a) |
| F. | The Nasdaq Smallcap Market - Additional Shares | 4520(b) |
| G. | Annual Fee - Domestic and Foreign Issues | 4520(c) |
| H. | Annual Fee - American Depository Receipts (ADRs) | 4520(d) |
| I. | Issuer Hearing Fee - Hearing Fee | 4530 |
| Part V | ||
| Requirements Applicable to Nasdaq Market Makers | 4600 | |
| 1. | Registration as a Nasdaq Market Maker | 4611 |
| 2. | Character of Quotations | 4613 |
| Nasd Autoquote Policy | IM-4613 | |
| 3. | Stabilizing Bids | 4614 |
| 4. | Automated Submission of Trading Data | 4615 |
| 5. | Reports | 4616 |
| 6. | Normal Business Hours | 4617 |
| 7. | Clearance and Settlement | 4618 |
| 8. | Withdrawal of Quotations and Passive Market Making | 4619 |
| 9. | Voluntary Termination of Registration | 4620 |
| 10. | Suspension and Termination of Quotations by Association Action | 4621 |
| 11. | Termination of Service | 4622 |
| Part VI | ||
| Consolidated Quotations Service (CQS) | 6300 | |
| 1. | Registration as a CQS Market Maker | 6320 |
| 2. | Obligations of CQS Market Maker | 6330 |
| NASD Autoquote Policy | IM-4613 | |
| 3. | Normal Business Hours | 6340 |
| 4. | Withdrawal of Quotations | 6350 |
| 5. | Voluntary Termination of Registration | 6360 |
| 6. | Suspension and Termination of Quotations by Association Action | 6370 |
| Part VII | ||
| Nasdaq Index Options | 2870 | |
| 1. | Definitions | 2871 |
| 2. | Nasdaq Index Options Services Available | 2872 |
| 3. | Registration, Qualification and Other General Requirements Applicable to All Nasdaq Index Options Market Makers | 2873 |
| 4. | Character of Index Options Quotations Entered into the Nasdaq Index Options Service by All Nasdaq Index Options Market Makers | 2874 |
| 5. | Commitment Rules Applicable to Options Market Makers in Nasdaq Index Options | 2875 |
| 6. | Sanctions Applicable to Nasdaq Index Options Market Makers | 2876 |
| 7. | Requirements Applicable to Nasdaq Index Options Order Entry Firms | 2877 |
| 8. | Transaction Reporting and Other Reporting Requirements | 2878 |
| 9. | Authorization of Nasdaq Index Option Market Making | 2879 |
| 10. | Nasdaq Index Options Contracts Authorized for Trading | 2880 |
| 11. | Series of Nasdaq Index Options for Trading | 2881 |
| 12. | Unit of Trading | 2882 |
| 13. | Suspension of Authorization of Nasdaq Index Option Contracts | 2883 |
| 14. | Trade Comparison Procedures for nasdaq Index Options | 2884 |
| 15. | Clearance and Settlement Procedures for Nasdaq Index Options | 2885 |
| 16. | Rules of General Applicability | [Deleted] |
| Part VIII | ||
| Schedule of NASD Charges for Services and Equipment | 7000 | |
| A. | System Services | 7010 |
| B. | Equipment Related Charges | 7020 |
| C. | Special Options | 7030 |
| D. | Installation, Removal or Relocation | 7040 |
| E. | Other Services | 7050 |
| F. | Partial Month Charges | 7060 |
| G. | Subscriber Deposits | 7070 |
| H. | Late Fees | 7080 |
| I. | Mutual Fund Quotation Program | 7090 |
| J. | Minor Modifications in Charges | 7100 |
| Part IX | [Rescinded] | |
| Part X | ||
| Reporting Transactions in Nasdaq National Market Securities | 4630 | |
| 1. | Definitions | 4631 |
| 2. | Transaction Reporting | 4632 |
| Interpretation on Transaction Reporting | IM-4632 | |
| Part XI | ||
| Reporting Transactions in Nasdaq Smallcap Market Securities | 4640 | |
| 1. | Definitions | 4641 |
| 2. | Transaction Reporting | 4642 |
| Interpretation on Transaction Reporting | IM-4632 | |
| 3. | Customer Confirmations | 4643 |
| Part XII | ||
| Reporting Transactions in Over-the-Counter Equity Securities | 6600 | |
| 1. | Definitions | 6610 |
| 2. | Transaction Reporting | 6620 |
| Interpretation on Transaction Reporting | IM-4632 | |
| Part XIII | ||
| Reporting Transactions in Convertible Debt Securities Traded On the Nasdaq Stock Market | 4650 | |
| 1. | Definitions | 4651 |
| 2. | Transaction Reporting | 4652 |
| Interpretation on Transaction Reporting | IM-4632 | |
| Part XIV | ||
| Mutual Fund Quotation Program | 6800 | |
| A. | Description | |
| B. | Eligibility Requirements | |
| C. | News Media Lists | |
| D. | Supplemental List | |
| E. | Determination of Number of Shareholders | |
| Schedule E | ||
| Distribution of Securities of Members and Affiliates - Conflicts of Interest | 2720 | |
| 1. | General | 2720(a) |
| 2. | Definitions | 2720(b) |
| 3. | Participation in Distribution of Securities of Member or Affiliate | 2720(c) |
| 4. | Disclosure | 2720(d) |
| 5. | Escrow of Proceeds, Net Capital Computation | 2720(e) |
| 6. | Audit Committee | 2720(f) |
| 7. | Public Director | 2720(g) |
| 8. | Period Reports | 2720(h) |
| 9. | Offerings Resulting in Affiliation or Public Ownership of Member | 2720(i) |
| 10. | Registration Statements for Intrastate Offerings | 2720(a) |
| 11. | Suitability | 2720(k) |
| 12. | Discretionary Accounts | 2720(l) |
| 13. | Sales to Employees-No Limitations | 2720(m) |
| 14. | Filing Requirements; Coordination with Corporate Financing Interpretation | 2720(n) |
| 15. | Predominance of Schedule E | 2720(o) |
| 16. | Requests for Exemption from Schedule E | 2720(p) |
| 17. | Violation of Schedule E | 2720(q) |
| Schedule F | [Rescinded] | |
| Schedule G | ||
| Reporting Transactions in Listed Securities | 6400 | |
| 1. | Definitions | 6410 |
| 2. | Transaction Reporting | 6420 |
| Interpretation on Transaction Reporting | IM-4632 | |
| 3. | Suspension of Trading | 6430 |
| 4. | Trading Practices | 6440 |
| 5. | Eligible Securities | 6450 |
| Resolution on Interpretations and Explanations | By-Laws, Art. XI, Sec. 4 | |
| Resolution on Limitations upon Use of Association Name | By-Laws, Art. XVI, Sec. 2 | |
| Schedule H | 6700 | |
| 1. | Definitions | 6710 |
| 2. | Price and Volume Reporting | 6720 |
| 3. | Automated Submission of Trade Data | 6730 |
| 4. | Submission of Rule 15c2-11 Information on Non-Nasdaq Securities | 6740 |
| 5. | Minimum Quotation Size Requirements for OTC Equity Securities | 6750 |
| Schedule I | ||
| PORTAL Market Rules | 5300 | |
| Part I | ||
| 1. | Definitions | 5310 |
| Part II | ||
| Requirements Applicable to PORTAL Securities | 5320 | |
| 1. | Application for Designation | 5321 |
| 2. | Qualification Requirements for PORTAL Securities | 5322 |
| 3. | Suspension or Termination of a PORTAL Security Designation | 5323 |
| Part III | ||
| Requirements Applicable to Members of the Association | 5330 | |
| 1. | Limitations on Transactions in PORTAL Securities | 5331 |
| 2. | Reporting Debt and Equity Transactions in PORTAL Securities | 5332 |
| 3. | PORTAL Settlement | 5333 |
| 4. | PORTAL Transaction Reports | 5334 |
| 5. | PORTAL Non-Participant Report | 5335 |
| 6. | PORTAL Surveillance Report | 5336 |
| 7. | Comparison of PORTAL Transaction Reports Entered in the PORTAL Market System | 5337 |
| 8. | Registration Requirements for PORTAL Dealers | 5338 |
| 9. | Registration Requirements for PORTAL Brokers | 5339 |
| 10. | Continuing Requirements for PORTAL Dealers and PORTAL Brokers | 5340 |
| Part IV | ||
| Requirements Applicable to PORTAL Qualified Investors | 5350 | |
| 1. | Registration Requirements for PORTAL Qualified Investors | 5351 |
| 2. | Continuing Requirements for PORTAL Qualified Investors | 5352 |
| 3. | Suspension or Termination of the Registration of a PORTAL Qualified Investor | 5353 |
| Part V | ||
| Denial, Suspension or Termination Procedures | 5360 | |
| Part VI | ||
| PORTAL Market Transactions | 5370 | |
| 1. | Normal PORTAL Market Hours of Operation | 5371 |
| 2. | PORTAL Quotations | 5372 |
| 3. | PORTAL Contracts | 5373 |
| 4. | PORTAL Fees | 5374 |
| 5. | "When, as and If Issued" Trading | 5375 |
| 6. | "Short" Sales | 5376 |
| 7. | Stabilizing Bids | 5377 |
| 8. | Partial Delivery | 5378 |
| 9. | Close-Out Procedures-"Buying-In" | 5379 |
| 10. | Close-Out Procedures-"Selling-Out" | 5380 |
| Part VII | ||
| Rules of Fair Practice | 5392 | |
| Part VIII | ||
| Arbitration | 5391 | |
| Part IX | ||
| PORTAL Fees | 5324 | |
| Schedule J | ||
| Trading in Index Warrants, Currency Index Warrants, and Currency Warrants | 2840 | |
| 1. | General | 2841 |
| 2. | Definitions | 2842 |
| 3. | Account Approval | 2843 |
| 4. | Suitability | 2844 |
| 5. | Discretionary Accounts | 2845 |
| 6. | Supervision of Accounts | 2846 |
| 7. | Customer Complaints | 2847 |
| 8. | Communications with the Public and Customers Concerning Index Warrants, Currency Index Warrants, and Currency Warrants | 2848 |
| 9. | Maintenance of Records | 2849 |
| 10. | Position Limits | 2850 |
| 11. | Exercise Limits | 2851 |
| 12. | Reporting Requirements | 2852 |
| 13. | Liquidation of Index Warrant Positions | 2853 |
| 14. | Trading Halts or Suspensions | 2854 |
| RULES OF FAIR PRACTICE | ||
| Article I | ||
| Adoption and Application | 0110 | |
| 1. | Adoption of Rules | 0111 |
| 2. | Effective Date | 0112 |
| 3. | Interpretation | 0113 |
| 4. | Effect on Transactions in Exempted Securities | 0114 |
| 5. | Applicability | 0115 |
| Article II | ||
| Definitions | ||
| 1. | Definitions in Rules | 0120 |
| 2. | Definitions in By-Laws | 0121 |
| Article III | ||
| Rules of Fair Practice | ||
| 1. | Business Conduct of Members | 2110 |
| Interpretation on Execution of Retail Transactions in the Over-the-Counter Market | 2320 | |
| Interpretaion on Prompt Receipt and Delivery of Securities | 3370 | |
| Interpretation on Forwarding of Proxy and Other Materials | 2260 | |
| Interpretation on "Free-Riding and Withholding" | IM-2110-1 | |
| Interpretation on Trading Ahead of Customer Limit Orders | IM-2110-2 | |
| Interpretation on Front Running Policy | IM-2110-3 | |
| Interpretation on Trading Ahead of Research Reports | IM-2110-4 | |
| 2. | Recommendations to Customers | 2310 |
| Policy on Fair Dealing with Customers | IM-2310-2 | |
| 3. | Charges for Services Performed | 2430 |
| 4. | Fair Prices and Commissions | 2440 |
| Interpretation on NASD Mark-Up Policy | IM-2440 | |
| 5. | Publication of Transactions and Quotations | 3310 |
| Interpretation on Manipulative and Deceptive Quotations | IM-3310 | |
| 6. | Offers at Stated Prices | 3320 |
| Policy with Respect to Firmness of Quotations | IM-3320 | |
| 7. | Disclosure of Price in Selling Agreements | 2770 |
| 8. | Securities Taken in Trade | 2730 |
| Interpretation on Safe Harbor and Presumption of Compliance | IM-2730 | |
| 9. | Use of Information Obtained in Fiduciary Capacity | 3120 |
| 10. | Influencing or Rewarding Employees of Others | 3060 |
| 11. | Payment Designed to Influence Market Prices, Other than Paid Advertising | 3330 |
| 12. | Disclosure on Confirmations | 2230 |
| Explanation on "Third Market Confirmations" | IM-2230 | |
| 13. | Disclosure of Control | 2240 |
| 14. | Disclosure of Participation or Interest in Primary or Secondary Distribution | 2250 |
| 15. | Discretionary Accounts | 2510 |
| 16. | Offering "At the Market" | 2760 |
| 17. | Solicitation of Purchase on an Exchange to Fcilitate a Distribution of Securities | 2780 |
| 18. | Use of Fraudulent Devices | 2120 |
| 19. | Customers' Securities or Funds | 2330 |
| Explanation of Paragraph (d) of Section 19 | IM-2330 | |
| 20. | Installment or Partial Payment Sales | 2450 |
| 21. | Books and Records | 3110 |
| 22. | Disclosure of Financial Condition | 2270 |
| Resolution on Requirements of Members to Furnish Recent Financial Statement to Other Members | 2910 | |
| 23. | Net Price to Persons Not in Investment Banking or Securities Business | 2410 |
| 24. | Selling Concessions | 2740 |
| Interpretation on Services in Distribution | IM-2710 | |
| 25. | Dealing with Non-Members | 2420 |
| Interpretation on Transactions Between Members and Non_Members | IM-2420-1 | |
| 26. | Investment Companies | 2830 |
| 27. | Supervision | 3010 |
| 28. | Transactions for or by Associated Persons | 3050 |
| 29. | Variable Contracts of an Insurance Company | 2820 |
| 30. | Margin Accounts | 2520 |
| 31. | Securities "Failed to Receive" and "Failed to Deliver" | 3210 |
| 32. | Fidelity Bonds | 3020 |
| 33. | Options | 2860 |
| Interpretations on Opening Accounts for Options Customer | IM-2860-2 | |
| 34. | Direct Participation Programs | 2810 |
| 35. | Communications with the Public | 2210 |
| Guidelines Regarding Communications with the Public Collateralized Mortgage Obligations (CMOs) | IM-2210-1 | |
| Guidelines Regarding Communications with the Public about Variable Life Insurance and Variable Annuities | IM-2210-2 | |
| Guidelines for the Use of Ranking in investment Companies Advertisements and Sales Literature | IM-2210-3 | |
| 35A. | Options Communications with the Public | 2220 |
| 36. | Transactions with Related Persons | 2750 |
| Interpretation on Transaction with Related Persons | IM-2750 | |
| 37. | [Reserved] | |
| 38. | Regulation of Activities of Members Experiencing Financial and/or Operational Difficulties | 3130 |
| Explanation on Restrictions on a Member's Activity | IM-3130 | |
| 39. | Approval of Change in Exempt Status under SEC Rule 15c3-3 | 3140 |
| 40. | Private Securities Transactions | 3040 |
| 41. | Short-Interest Transactions | 3360 |
| 42. | Prohibition on Transactions During Trading Halts | 3340 |
| 43. | Outside Business Activities | 3030 |
| 44. | The Corporate Financing Rule | 2710 |
| 45. | Customer Account Statements | 2340 |
| 46. | Adjustment of Open Orders | 3220 |
| 47. | Clearing Agreements | 3230 |
| 48. | Short Sale Rule | 3350 |
| Interpretation on Short Sale Rule | IM-3350 | |
| 49. | Primary Nasdaq Market Maker Standards | 4612 |
| 50. | Reporting Requirements | 3070 |
| Article IV | ||
| Complaints | ||
| 1. | Availability to Customer of Certificate, By-Laws, Rules and Code of Procedure | 8110 |
| 2. | Complaints by Public Against Members for Violations of Rules | 8120 |
| 3. | Complaints by District Business Conduct Committees | 8130 |
| 4. | Complaints by the board of Governors | 8140 |
| 5. | Reports and Inspection of Books for Purpose of Investing Complaints | 8210 |
| Resolution on Suspension of Members for Failure to Furnish Information Duly Requested | 8220 | |
| Article V | ||
| Penalties | ||
| 1. | Sanctions for Violation of the Rules | 8310 |
| Interpretation on the Effect of a Suspension or Revocation of the Registration, If Any, of a Person Associated with a member or the Barring of a Person from Further Association with a Member | IM-8310-1 | |
| Resolution on Notice to Membership and Press of Suspension, Expulsions, Revocation, and Monetary Sanctions and Release of Certain Information Regarding Disciplinary History of Members and Their Associated Persons | IM-8310-2 | |
| 2. | Payments of Fines, Other Monetary Sanctions, or Costs | 8320 |
| 3. | Costs of Proceedings | 8330 |
| Article VI | ||
| Current Membership List | 1130 | |
| GOVERNMENT SECURITIES RULES | [ToBeRescinded] | |
| SOES RULES | ||
| a. | Definitions | 4710 |
| b. | SOES Participant Registration | 4720 |
| c. | Participant Obligations in SOES | 4730 |
| d. | Clearance and Settlement | 4740 |
| e. | Obligations to Honor System Trades | 4750 |
| f. | Compliance with Rules and Registration Requirements | 4760 |
| Fees Applicable to SOES | 4770 | |
| ITS/CAES RULES | ||
| a. | Definitions | 5210 |
| b. | ITS/CAES Registration | 5220 |
| c. | Suspension or Revocation of ITS/CAES Registration | 5221 |
| d. | ITS Operations | 5230 |
| e. | Pre-Opening Application-Opening by ITS/CAES Market Maker | 5240 |
| f. | Pre-Opening Application-Opening on Other Participant Markets | 5250 |
| g. | Obligation to Honor System Trades | 5261 |
| h. | Trade-Thoughts | 5262 |
| i. | Locked or Crossed Markets | 5263 |
| j. | Block Transactions | 5264 |
| k. | Authority to Cancel or Adjust Transactions | 5265 |
| ACT RULES | ||
| a. | Definitions | 6110 |
| b. | Participation in ACT | 6120(a) |
| c. | Participation Obligations in ACT | 6120(b) |
| d. | Trade Report Input | 6130 |
| e. | ACT Processing | 6140 |
| f. | ACT Risk Management Functions | 6150 |
| g. | Obligation to Honor Trades | 6160 |
| h. | Audit Trail Requirements | 6170 |
| i. | Violation of ACT Rules | 6180 |
| j. | Termination of ACTS Service | 6190 |
| FIXED INCOME PRICING SYSTEM RULES | ||
| Part I | ||
| Definitions | 6210 | |
| Part II | ||
| Resignation of High Yield Bonds Quoted in the Fixed Income Pricing System | 6220 | |
| Part III | ||
| Requirements Applicable to Participants in the Fixed Income Pricing System - Quotations | 6230 | |
| a. | Participations in FIPS | |
| b. | Participant Obligations in FIPS | |
| c. | Character of Quotations | |
| d. | Operating Hours | |
| e. | Quotations Halts | |
| f. | Voluntary Termination of Quotations | |
| g. | FIPS Processing and Trade Execution Functions | |
| Part IV | ||
| Reporting Transactions in High Yield Fixed Income Securities | 6240 | |
| a. | Trade Reporting Requirements for Bonds Quoted in FIPS | |
| b. | Trade Reporting Requirements for High Yield Bonds Not Quoted in FIPS | |
| c. | Transaction Not Required to Be Reported | |
| Part V | ||
| Dissemination of Quotation and Volume Information | 6250 | |
| Part VI | ||
| Compliance with FIPS Rules and Trade Reporting Requirements | 6260 | |
| OTCBB RULES | 6500 | |
| 1. | Applicability | 6510 |
| 2. | Operation of the Service | 6520 |
| 3. | OTCCB-Eligible Securities | 6530 |
| 4. | Requirements Applicable to Market Makers | 6540 |
| 5. | Transaction Reporting | 6550 |
| NASDAQ INTERNATIONAL SERVICE RULES | 5100 | |
| 1. | Applicability | 5101 |
| 2. | Definitions | 5102 |
| 3. | Normal Business Hours | 5103 |
| 4. | Qualified Securities | 5104 |
| 5. | Access | 5105 |
| 6. | Requirements Applicable to Market Makers | 5106 |
| 7. | Automated Submission of Trading Data | 5107 |
| 8. | Reports | 5108 |
| 9. | Clearance and Settlement of International Transactions | 5109 |
| 10. | Suspension and Termination of Quotations by NASD Action | 5110 |
| 11. | Termination of Access | 5111 |
| 12. | Transaction Reporting Requirements | 5112 |
| 13. | Audit Trail Requirements | 5113 |
| CODE OF PROCEDURE | 9000 | |
| Article I | ||
| Application and Purpose of Code | ||
| 1. | Purpose | 9110 |
| 2. | Definitions | 9120 |
| 3. | Interpretation | 9110(c) |
| 4. | Communication Relating to Grievances | 9111 |
| Article II | ||
| Disciplinary Actions by District Business Conduct Committees, The Market Surveillance Committee and Others | 9200 | |
| 1. | Issuance of Complaints by Committees | 9211 |
| 2. | Form, Content, Notice and Withdrawal of Complaints | 9212 |
| 3. | Answer to Complaints | 9216 |
| 4. | Request for Hearing | 9221 |
| 5. | Venue | 9222 |
| 6. | Hearing Panels | 9223 |
| 7. | Evidence and Procedure in Committee Hearings | 9224 |
| 8. | Decision of the Committee | 9225 |
| 9. | Consolidation of the Committee | 9215 |
| 10. | Acceptance, Waiver and Consent, Minor Rule Violations And Summary Complaint Procedure | 9217 |
| 11. | Settlement Procedure | 9226 |
| 12. | Complaints Directed by the Board or the National Business Conduct Committee | 9213 |
| 13. | Complaint Docket | 9214 |
| Article III | ||
| 1. | Review of Disciplinary Actions by the National Business Conduct Committee and the Board | 9310 |
| 2. | Proceedings | 9311 |
| 3. | Evidence in National Business Conduct Committee Proceedings | 9312 |
| 4. | Powers of the National Business Conduct Committee on Review | 9313 |
| 5. | Decision of the National Business Conduct Committee | 9314 |
| 6. | Notification of Decision; Final Disciplinary Action | 9315 |
| 7. | Discretionary Review by the Board | 9316 |
| 8. | Application to SEC for Review | 9317 |
| Article IV | ||
| Imposition of Sanctions and Costs | 9400 | |
| 1. | Sanctions | 9410 |
| 2. | Costs of Proceedings | 9420 |
| Article V | ||
| Limitations and Approval Procedures under Article III, Sections 38 and 39 of the Rules of Fair Practice | 9500 | |
| A. | Procedures under Article III, Section 38 of The Rule of Fair Practice | 9510 |
| 1. | Board of Governors' Surveillance Committee | 9511 |
| 2. | District Surveillance Committee | 9512 |
| 3. | Written Notification | 9513 |
| 4. | Hearing | 9514 |
| 5. | Decision and Effective Date | 9515 |
| 6. | Review by Board | 9516 |
| 7. | Composition of Board of Governors' Hearing Panel | 9517 |
| 8. | Decision | 9518 |
| 9. | Application to Commission for Review | 9519 |
| 10. | Successive Notices | 9520 |
| 11. | Complaint by the Committee | 9521 |
| B. | Procedures under Article III, Section 39 of The Rules of Fair Practice | 9530 |
| 1. | District Staff Procedures | 9531 |
| 2. | District Business Conduct Committee Review | 9532 |
| 3. | Review by Board | 9533 |
| 4. | Decision of Board | 9534 |
| 5. | Applicable to Commission for Review | 9535 |
| Article VI | ||
| Revocation Proceedings | 9620 | |
| 1. | Purpose | 9621 |
| 2. | Commencement of Revocation Proceedings | 9622 |
| 3. | Hearings | 9623 |
| 4. | Decisions | 9624 |
| 5. | Other Action Not Foreclosed | 9625 |
| Article VII | ||
| Eligibility Proceedings | 9640 | |
| 1. | Purpose | 9641 |
| 2. | Eligibility Proceedings | 9642 |
| Article VIII | ||
| Summary Suspension | 9610 | |
| 1. | Summary Action | 9611 |
| 2. | Written Notification | 9612 |
| 3. | Request for Hearing | 9613 |
| 4. | Hearing | 9614 |
| 5. | Decision | 9615 |
| 6. | Review by Board | 9616 |
| 7. | Finding of Board on Review | 9617 |
| 8. | Application to Commission for Review | 9618(a) |
| 9. | Application to Commission for Stay of Summary Action | 9618(b) |
| 10. | Other Action Not Foreclosed | 9619 |
| Article IX | ||
| Procedures on Grievances Concerning the Automated System | 9700 | |
| 1. | Purpose | 9710 |
| 2. | Form of Application | 97203 |
| 3. | Request for Hearing | 9730 |
| 4. | Consideration of Applications | 9740 |
| 5. | Decision | 9750 |
| 6. | Review by the Nasdaq Hearing Review Committee | 9760 |
| 7. | Findings of Nasdaq Hearing Review Committee on Review | 9770 |
| 8. | Discretionary Review by the Board | 9780 |
| 9. | Application to Commission for Review | 9790 |
| Article X | ||
| Miscellaneous | ||
| 1. | Grounds of Disqualification of Participate in Proceedings | 9131 |
| 2. | Reports and Examination of Books and Records | 9132 |
| 3. | Rulings on Procedural Matters | 9133 |
| 4. | Service of Complaints, Decisions and Other Notices | 9134 |
| 5. | Amendments to Code of Procedure | [Deleted] |
| Article XI | ||
| Expedited Remedial Proceedings | 9630 | |
| 1. | Purpose | 9631 |
| 2. | Commencement of Expedited Remedial Proceedings | 9632 |
| 3. | District or Market Surveillance Decision | 9633 |
| 4. | Review by Board | 9634 |
| 5. | Board Decision | 9635 |
| 6. | Hearings | 9636 |
| 7. | Other Action Not Foreclosed | 9637 |
| 8. | Application to Commission for Review | 9638 |
| Article XII | ||
| Code of Procedures for Corporate Financing and Direct Participation Program Matters | 9800 | |
| 1. | Purpose | 9810 |
| 2. | Application by Aggrieved Member | 9820 |
| 3. | Application for Review | 9830 |
| 4. | Notice of Hearing | 9840 |
| 5. | Hearing Committee and Procedure | 9850 |
| 6. | Requirement for Written Determination | 9860 |
| 7. | Review by Committee of Board | 9870 |
| 8. | Nature of Determination | 9880 |
| UNIFORM PRACTICE CODE | 11000 | |
| 1. | Scope of Uniform Practice Code | 11100 |
| 2. | Committees | 11110 |
| Resolution on Refusal to Abide by Rulings of the Committee | IM-11110 | |
| 3. | Definitions | 11120 |
| 4. | When, as and If Distributed Contracts | 11130 |
| Ruling on Notice re: Trade Date | IM-11120 | |
| 5. | Transactions in Securities "Ex-Dividend," "Ex-Rights" or "Ex-Warrants" | 11140 |
| 6. | Transactions "Ex-Interest" in Bonds Which Are Dealt in "Flat" | 11150 |
| 7. | Transactions in "Part-Redeemed" Bonds | 11160 |
| 8. | Comparisons or Confirmations and "Don't Know Notices" | 11170 |
| Comparisons or Confirmations and "Don't Know Notices" | 11200 | |
| 9. | Sent by Each Party | 11210 |
| 10. | Description of Securities | 11220 |
| Delivery of Securities | 11300 | |
| 11. | Book Entry Settlement | 11310 |
| 12. | Dates of Delivery | 11320 |
| 13. | Payment | 11330 |
| 14. | Stamp Taxes | 11340 |
| 15. | Part Delivery | 11350 |
| 16. | Units of Delivery-Stocks | 11360 |
| 17. | Units of Delivery-Bonds | 11370 |
| 17A. | Units of Delivery-Unit Investment Trust Securities | 11380 |
| 18. | Units of Delivery-Certificates of Deposit for Bonds | 11390 |
| Ruling on Notice re: Trading Securities as "Units" or Bonds "With Stock" | IM-11390 | |
| Delivery of Securities with Draft Attached | 11400 | |
| 19. | Acceptance of Draft: Time of Presentation | 11410(a) |
| 20. | Prior to Settlement Date | 11410(b) |
| 21. | With Irregularities | 11410(c) |
| 22. | Expenses Due to Shipment | 11410(d) |
| 23. | Expenses Due to Delay | 11410(e) |
| 24. | Claims for Irregularities | 11410(f) |
| Delivery of Securities with Restrictions | 11500 | |
| 25. | Delivery of Temporary Certificates | 11510 |
| 26. | Delivery of Mutilated Securities | 11520 |
| 27. | Delivery of Securities Called for Redemption or Which are Deemed Worthless | 11530 |
| 28. | Delivery under Government Regulations | 11540 |
| 29. | Assignments and Powers of Substitution; Delivery of Registered Securities | 11550 |
| 30. | [Rescinded] | |
| 31. | Certificate of Company Whose Transfer Books Are Closed | 11560 |
| 32. | Certificate in Name of Corporation, Etc. | 11571 |
| 33. | Certificate in Name of Firm | 11572 |
| 34. | Certificate in Name of Dissolved Firm Succeeded by New Firm | 11573 |
| 36. | Certificate in Name of Deceased Person, Trustee, Etc. | 11574 |
| Delivery of Bonds and Other Evidences of Indebtedness | 11600 | |
| 39. | Liability for Expenses | 11610 |
| 40. | Coupon Bonds | 11610(a) |
| 41. | Registerable as to Principal | 11610(d) |
| 42. | Endorsements for Banking or Insurance Requirements | 11610(e) |
| 43. | Coupon Detached Prior to Delivery | 11610(f) |
| 44. | Stamped Bonds | 11610(g) |
| 45. | Certificates of Deposit | 11610(h) |
| 46. | Computation of Interest | 11620 |
| 48. | Due-Bills and Due-Bill Checks | 11630 |
| 49. | Claims for Dividends, Rights, Interest, Etc. | 11640 |
| 50. | Transfer Fees | 11650 |
| Reclamation and Rejection | 11700 | |
| 51 | Definitions | 11710(a) |
| 52. | Uniform Reclamation Form | 11710(b) |
| 53. | Time for Delivery on Reclamation and Manner of Settlement | 11710(c) |
| 54. | Minor Irregularities | 11710(d) |
| 55. | Wrong Form of Certificate | 11710(e) |
| 56. | Irregular Delivery - Transfer Refused - Lost or Stolen Securities | 11720 |
| Policy Obligations of Members Who Discover Securities in Their Possession to Which They Are Not Entitled | IM-11720 | |
| 57. | Called Securities | 11730 |
| 58. | Marking to the Market | 11740 |
| Close-Out Procedure | 11800 | |
| 59. | "Buying-In" | 11810 |
| 60. | "Selling-Out" | 11820 |
| 61. | Rights and Warrants | 11840 |
| 62. | CUSIP Number | 11100(d) |
| 63. | Tendering Procedures for Exercise of Options | 11850 |
| 64. | Acceptance and Settlement of COS Orders | 11860 |
| 65. | Customer Account Transfer Contracts | 11870 |
| 66. | Settlement of Syndicate Accounts | 11880 |
| 67. | Settlement of Underwritten Public Offerings | 11880(d) |
| 68. | Use of Trade Acceptance and Reconciliation Service | 11180 |
| 69. | Reconfirmation and Pricing Service Participants | 11190 |
| Clearly Erroneous Trades | 11890 | |
| 70. | Authority to Declare Transactions Void | 11890(a) |
| Mandatory Close-Out for Short Sales | 11830 | |
| 72. | Clearance of Corporate Debt Securities | 11900 |
| CODE OF ARBITRATION PROCEDURE | ||
| Part I | ||
| Administrative Provisions | 10100 | |
| 1. | Matters Eligible for Submission | 10101 |
| 2. | National Arbitration Committee | 10102 |
| 3. | Director of Arbitration | 10103 |
| 4. | Composition and Appointment of Panels | 10104 |
| Resolution on Arbitrators' Honorarium | IM-10104 | |
| 5. | Non-Waiver of Association Objects and Purposes | 10105 |
| 6. | Legal Proceedings | 10106 |
| 7. | Amendments, Modification, or Cancellation of Code | [Deleted] |
| Part II. | ||
| Industry and clearing Controversies | 10200 | |
| 8. | Required Submission | 10201 |
| 9. | Composition fo Panels | 10202 |
| 10. | Simplified Industry Arbitration | 10203 |
| 11. | Applicability of Uniform Code | 10204 |
| Part III. | ||
| Uniform Code of Arbitration | 10300 | |
| 12. | Required Submission | 10301 |
| 13. | Simplified Arbitration | 10302 |
| Interpretation on Related Counterclaim | IM-10302 | |
| 14. | Hearing Requirements—Waiver of Hearing | 10303 |
| 15. | Time Limitation upon Submission | 10304 |
| 16. | Dismissal of Proceedings | 10305 |
| 17. | Settlements | 10306 |
| 18. | Tolling of Time Limitations(s) for the Institution of Legal Proceedings and Extension of Time Limitation(s) for Submission to Arbitration | 10307 |
| 19. | Designation of Number of Arbitrators | 10308. |
| 20. | Composition of Panels | 10309 |
| 21. | Notice of Selection of Arbitrators | 10310 |
| 22. | Peremptory Challenge | 10311 |
| 23. | Disclosures Required of Arbitrators | 10312 |
| 24. | Disqualified or Other Disability of Arbitrators | 10313 |
| 25. | Initiation of Proceedings | 10314 |
| 26. | Designation of Time and Place of Hearing | 10315 |
| 27. | Representation by Counsel | 10316 |
| 28. | Attendance at Hearings | 10317 |
| 29. | Policy on Closing Arguments | IM-10317 |
| 29. | Failure to Appear | 10318 |
| 30. | Adjournments | 10319 |
| 31. | Acknowledgement of Pleadings | 10320 |
| 32. | General Provisions Governing Pre-Hearing Proceedings | 10321 |
| 33. | Subpoenas and Power to Direct Appearances | 10322 |
| 34. | Evidence | 10323 |
| 35. | Interpretation of Provisions of Code and Enforcement of Arbitrator Rulings | 10324 |
| 36. | Determination of Arbitrators | 10325 |
| 37. | Record of Proceedings | 10326 |
| 38. | Oaths of the Arbitrators and Witnesses | 10327 |
| 39. | Amendments | 10328 |
| 40. | Reopening of Hearings | 10329 |
| 41. | Awards | 10330 |
| 42. | Incorporation by Reference | 10331 |
| 43. | Schedule of Fees for Customer Disputes | 10332 |
| 44. | Schedule of Fees for Industry and Clearing Controversies | 10205 |
| 45. | Member Surcharge | 10333 |
| 46. | Procedures for Large and Complex Cases | 10334 |
| 47. | Injunctions | 10335 |
| 48. | [Reserved] | |
| 49. | [Reserved] | |
| Part IV | ||
| Mediation Rules | 10400 | |
| 50. | Scope and Authority | 10401 |
| 51. | Submission of Eligible Matters | 10402 |
| 52. | Arbitration Proceedings | 10403 |
| 53. | Mediator Selection | 10404 |
| 54. | Limitation on Liability | 10405 |
| 55. | Mediation Ground Rules | 10406 |
| Resolution on Failure to ACT under Provisions of Code of Arbitration Procedure | IM-10100 | |
| Investment Company Securities | [Deleted] | |
| Introduction | [Deleted] | |
| Interpretation and Policies of the Board of Governors Regarding Investment Company Securities | ||
| Promt Payment by Members for Shares of Investment Companies | [Rescinded] | |
| "Breakpoint" Sales | IM-2830-1 | |
| Policy with Respect to Continuing Commissions | IM-2420-2 | |
| Maintaining the Policy Offering Price | IM-2830-2 | |
| Explanatory Material Concerning Investment Company Sales Literature and Advertising | ||
| "Tombstone" Advertising (SEC Rule 134) | SEC Rules Tab | |
| Generic or Institutional Literature and Advertising (SEC Rule 15a) | SEC Rules Tab | |
| Investment Company Prospectus Advertising (SEC Rule 482) | SEC Rules Tab | |
| Sales Literature Deemed to Be Misleading (SEC Rule 34b-1) | SEC Rules Tab | |
| Investment Company Sales Literature (SEC Rule 156 | SEC Rules Tab | |
| Guidelines Regarding Communications with the Public about Investment Companies and Variable Contracts | [Rescinded] | |