NASD Rule Filing Status (July)
Rule Filing Status As Of July 7, 1999
NASD Rule Filing Status
The following is a list of rule filings by the National Association of Securities Dealers, Inc. (NASD® or Association) that are either pending at the Securities and Exchange Commission (SEC) or recently have been approved by the SEC and have not been announced in a Notice to Members. The information is current as of July 7, 1999. Copies of rule filings (and any amendments thereto), the SEC release publishing the rule proposal for comment, and the SEC release approving the rule change are available from the SEC Public Reference Room at (202) 942-8090, or from Christopher Leigh, NASD Office of General Counsel, at (202) 728-8236 or via e-mail at [email protected] (in certain cases a fee may be required). NASD rule changes are not effective until approved by the SEC.
Rule Filings That Have Not Been Published For Comment By The SEC
99-32
Amend Rule 6750 to provide for limited discretionary authority among Nasdaq® senior management to reduce the minimum quotation size for certain securities quoted at aprice exceeding $200 in the OTC Bulletin Board.
99-31
Amend Rule 7010 to permit NASD members that currently report trades to the Nasdaq Workstation I to instead use the Nasdaq Automated Confirmation Transaction ServiceSM(ACTSM) Desk to report trades to ACT, provided the members report an average of 20 or fewer trades perday. Amendment No. 1 filed with the SEC on June 17, 1999.
99-29
Amend Rule 7010 to extend the pilot program for an additional six months in order to provide a transaction credit to NASD members that exceed certain levels of trading activity in exchange-listed securities.
99-26
Amend the NASD Code of Procedure to, among other things: (i) expand the circumstances under which an aggrieved party may request a hearing to challenge an Association action that the party believes constitutes a "denial of access"; (ii) expand the pool ofpotential hearing panelists in denialof access proceedings, and simplify the process by which panelists areselected; and (iii) establish theGeneral Counsel for the NASD as the custodian of the record in denialof access cases.
99-24
Amend Rule 7010 to establish a oneyear pilot program, commencing with the April 1, 1999 billing period, to reduce the fees for Nasdaq Level 1 market to non-professional users by 50 percent on either a per query or monthly basis.
99-05
Amend Rule 2520 relating to margin for exempted borrowers, good faith accounts, joint back office arrangements, and options transactions.
98-74
Amend Rule 3110 to require additional disclosure in pre-dispute arbitration agreements regarding the arbitration process including: possible limits on eligibility of claims and availability of punitive damages; requiring member firms to provide certain information regarding arbitration and pre-dispute arbitration agreements to customers upon request; and clarifying the rule regarding use of choice-of-law provisions in pre-dispute arbitration agreements.
98-55
Amend Section 8 of Schedule A of the NASD By-Laws with respect to the collection of SEC transaction fees (SEC Fees).
98-40
Amend Rule 3350 governing short sales in Nasdaq National Market® (NNM) securities to allow Market Makers and broker/dealers to engage in certain customer facilitating, liquidity-providing transactions (Facilitation Exemption).
98-11
Adopt IM-2210-5, Presentation of Mutual Fund and Variable Contract- Related Performance Information, and amend Rule 2210 and IM-2210-2 to permit the presentation of related performance information (other than manager performance information) in mutual fund and variable product sales material, subject to certain conditions designed to make the presentation fair, balanced, and not misleading.
Rule Filings That Have Been Published For Comment But Have Not Been Approved ByThe SEC
99-23
Amend Rule 4613(e) regarding locked and crossed market conditions that occur prior to the market's opening. Amendment No. 1 filed with the SEC on May 14, 1999. Published for comment by the SEC in Release No. 34-41473 (June 2, 1999); 64 F.R. 31335 (June 10, 1999). Comment period expired July 1, 1999.
99-16
Amend Rules 3320, IM-3320, 4613, 4615, 4623 to: (1) require Market Makers and electronic communication networks (ECNs) to round their quotations to the next minimum quotation increment when the Market Maker or ECN charges another market participant a fee in excess of one-half of one cent to access its quote; and (2) amend certain NASD quotation rules to remove any arguable prohibitions that could prevent Market Makers from charging a fee when their agency quote is accessed. Amendment No. 1 filed with the SEC on April 22, 1999. Published for comment by the SEC in Release No.34-41343 (April 28, 1999); 64 F.R. 24430 (May 6, 1999). Comment period expired June 1, 1999.
99-15
Amend Rule 1015 to eliminate the procedures for members of the National Adjudicatory Council to call for review membership decisions until October 31, 1999. Amendment No. 1 filed with the SEC on April 16, 1999. Published for comment by the SEC in Release No. 34-41311 (April 20, 1999); 64 F.R. 20347 (April 26, 1999). Comment period expired May 17, 1999.
99-12
Amend Rule 7010 to establish a fee for a voluntary trading data distribution facility, named Nasdaq Post DataSM, accessible to NASD members, buy-side institutions (Qualified Institutional Buyers [QIBs]1) and market data vendorsthrough its "NasdaqTrader.com"Web Site. Amendment No. 1 filed with the SEC on March 23, 1999.Published for comment by the SEC in Release No. 34-41244 (April 1, 1999); 64 F.R. 17429 (April 9, 1999). Comment period expired April 30,1999.
99-11
Amend Rules 4611, 4613, 4618, 4619, 4620, 4632, and Series 4700 to re-establish SelectNetSM as an order delivery and negotiation system for NNM securities and make numerous changes to the current rules relating to the trading of NNM securities. Published for comment by the SEC in Release No. 34-41296 (April 15, 1999); 64 F.R. 19844 (April 22, 1999). Comment period expired June 1, 1999.
99-09
Amend Rule 4613 to permit the separate display of customer orders by Market Makers in Nasdaq through a Market Maker agency identific a t i o n symbol. Published for comment by the SEC in Release No. 34-41128 (March 2, 1999); 64 F.R. 12198 (March 11, 1999). Comment period expired April 1, 1999. Comment period extended in SEC Release No. 34-41243 (April 1, 1999); 64 F.R. 17428 (April 9, 1999). Comment period expired June 1, 1999.
99-08
Amend Rules 10201 and 10202, and adopt new Rule 3080 and new Rule Series 10210 to enhance the dispute resolution process for the handling of employment discrimination disputes, and to expand disclosure to employees concerning the arbitration of all disputes. Amendment No. 1 filed with the SEC on May 7, 1999. Published for comment by the SEC in Release No. 34-41461 (May 27, 1999); 64 F.R. 30081 (June 4, 1999). Comment period expired June 25, 1999.
99-07
Submission of proposed Discovery Guide for use in arbitration proceedings to improve the discovery process in NASDsponsored securities arbitrations. The Discovery Guide consists of introductory and instructional text, and 14 document production lists. Amendment No. 1 filed with the SEC on March 23, 1999. Amendment No. 2 filed with the SEC on April 9, 1999. Published for comment by the SEC in Release No. 34-41302 (April 16, 1999); 64 F.R. 20036 (April 23, 1999). Comment period expired May 14, 1999.
99-04
Adopt new Rule 2315, which would require members to review current issuer information prior to recommending a transaction to a customer in an over-the-counter (OTC) equity security. Additionally, the proposed rule change would amend NASD Rule 6740 to permit members to submit a certification to the Association that states that the member has conducted a review of specified information and has fulfilled its SEC Rule 15c2-11 obligations for documents that currently reside on the SEC's EDGAR database. Published for comment by the SEC in Release No. 34-41075 (February 19, 1999); 64 F.R. 10037 (March 1, 1999). Comment period expired March 22, 1999.
99-02
Amend IM-2110-1 and Rule 2720 to clarify the definition of "public offering" to include all offerings of securities exempt from SEC registration under SEC Rule 504. Published for comment by the SEC in Release No. 34-41519 (June 11, 1999); 64 F.R. 32907 (June 18, 1999). Comment period expired July 9, 1999.
98-85
Adopt new Rules 4990 through 4998 to establish the Nasdaq Application, a new electronic trading system based on the innovative information processing technology provided by OptiMark Technologies, Inc. Published for comment by the SEC in Release No. 34-40835 (December 28, 1998); 64 F.R. 549 (January 5, 1998). Comment period expired January 26, 1999.
98-80
Adopt Rule 9800 Series to establish procedures to enable NASD Regulation to issue temporary cease and desist orders. The proposed rule change also would grant NASD Regulation authority to take expedited disciplinary actions when temporary or permanent cease and desist orders are violated. Amendment No. 1 filed with the SEC on December 5, 1998. Published for comment by the SEC in Release No. 34-40826 (December 22, 1998); 63 F.R. 71984 (December 30, 1998). Comment period expired March 1, 1999.
98-61
Amend Rule 6420 to eliminate an unnecessary provision relating to the reporting of transactions in exchange-listed securities traded in the third market. Published forcomment by the SEC in Release No. 34-40360 (August 21, 1998); 63 F.R. 46267 (August 31, 1998). Comment period expired September 25, 1998.
98-49
Amend Rule 10335 to make it a permanent part of the Code of Arbitration. Amendment No. 1 filed with the SEC on September 9, 1998. Amendment No. 2 filed with the SEC on September 10, 1998. AmendmentNo. 3 filed with the SEC on December 3, 1998. Published forcomment by the SEC in Release No. 34-40441 (September 15, 1998); 63 F.R. 50611 (September 22, 1998). Comment period expired October 13,1998.
98-44
Amend Rule 1060 and create new Interpretative Material, IM-3010, to codify existing practice by exempting from registration persons whose securities business is limited to certain limited marketing activities and specify supervisoryrequirements for membersconcerning such unregistered persons. Published for comment by the SEC in Release No. 34-40784 (December 15, 1998); 63 F.R. 70173 (December 18, 1998). Comment period expired January 8, 1999.
98-32
Amend Rule 2210 to exclude independently-prepared research reports from the filing requirements of Rule 2210. Amendment No. 1 fil e d with the SEC on May 13, 1998. Published for comment by the SEC in Release No. 34-40074 (June 4, 1998); 63 F.R. 32690 (June 15, 1998). Comment period expired July 6, 1998. Amendment No. 2 filed with the SEC on June 29, 1999.
98-18
Adopt a new membership Rule 1150 that would provide NASD members with qualified immunity in arbitration proceedings for statements made in good faith in certain disclosures filed with the NASD on Forms U-4 and U- 5. Published for comment by the SEC in Release No. 34-39892 (April 21, 1998); 63 F.R. 23321 (April 28, 1998). Comment period extended in SEC Release No. 34-40005 (May 19, 1998); 63 F.R. 29050 (May 27, 1998). Comment period expired June 19, 1998.
98-17
Amend Rules 4611, 4613, 4618, 4619, 4620, 4632, 4642, and adopt new Rule Series 4900 to establish an integrated order delivery and execution system. The new system would replace the existing Small Order Execution SystemSM(SOESSM) and SelectNet, while retaining certain features of each in a combined infrastructure. It also will feature a voluntary limit order book. In addition, a component of the new system will permit institutions to obtain direct electronic access to The Nasdaq Stock Market® through a sponsored arrangement with a Nasdaq Market Maker. Amendment No. 1 filed with the SEC on March 3, 1998. Published for comment by the SEC in Release No. 34-39718 (March 4, 1998); 63 F.R. 12124 (March 12, 1998). Comment period expired April 2, 1998. Comment period extended in SEC Release No. 34-39794 (March 25, 1998); 63 F.R. 15471 (March 31, 1998). Comment period expired May 8, 1998.
98-14
98-08
Amend trade reporting Rules 4623, 4632, 4652, 6420, and 6620. The proposals would: 1) implement a new trade report modifier to identify trades effected at a prior reference price; 2) eliminate the 10,000-share limitation on individual trades that may be "bunched" for trade reportingpurposes; 3) require ECNs to be responsible for reporting all trades executed within the ECN; and 4) address risk-less principal trades involving exchange-listed securities traded in the third market. Published for comment by the SEC in Release No. 34-40047 (June 2, 1998); 63F.R. 30791 (June 5, 1998). Comment period expired June 26, 1998.
97-89
Adopt a new interpretation to Rule 2210 to permit the use by members and associated persons of bond mutual fund volatility ratings in supplemental sales literature on an interim 18-month pilot basis. Published for comment by the SEC in Release No. 34-40627 (November 2, 1998); 63 F.R. 60431 (November 9, 1998). The comment period expired November 30, 1998.
97-61
Adopt new IM-2240-2: Application of the NASD Mark-Up Policy to Transactions in Government and Other Debt Securities. Published for comment by the SEC in Release No. 34-40511 (September 30, 1998); 63 F.R. 54169 (October 8, 1998). Comment period expired December 7, 1998.
97-58
Amend Rule 3350 to implement Short Sale Rule on a permanent basis. Published for comment by the SEC in Release No. 34-38979 (August 26, 1997); 62 F.R. 46537 (September 3, 1997). Comment period expired September 24, 1997.
97-47
Adopt new Rule 10336 to the Code of Arbitration Procedure to cap punitive damages at the lesser of twice compensatory damages or $750,000. Amendment No. 1 filed with the SEC on October 17, 1997. Amendment No. 2 filed with the SEC on November 14, 1997. Published for comment by the SEC in Release No. 34-39371 (November 26, 1997); 62 F.R. 64428 (December 5, 1997). Comment period expired December 29, 1997.
97-44
Amend Rule 10304 of the Code of Arbitration Procedure (Eligibility Rule) to retain current six-year eligibility rule, provide that all claims shall be eligible for arbitration unless challenged, eliminate involuntary bifurcation of claims, and eliminate election of remedies. Amendmen No. 1 filed with the SEC on July 14, 1997. Amendment No. 2 filed with the SEC on July 18, 1997.Amendment No. 3 filed with the SEC on December 3, 1997. Amendment No. 4 filed with the SEC on December 18, 1997. Published forcomment by the SEC in Release No. 34-39487 (December 23, 1997); 63 F.R. 588 (January 6, 1998). Comment period expired January 27,1998.
97-12
Amend Rule 2340 relating to the disclosure of values for direct participation program and real estate investment trust securities on customer account statements. Published for comment by the SEC in Release No. 34-38451 (March 27, 1997); 62 F.R. 15945 (April 3, 1997). Comment period expired April 24, 1997. Amendment No. 1 filed with the SEC on June 26, 1997. Submission dated June 26, 1997, responds to comments. Amendment No. 2 filed with the SEC on July 7, 1997.
96-47
Amend Rule 10304, Code of Arbitration Procedure, to establish interim policy of referring eligibility determinations to the arbitrators and to eliminate eligibility determinations by the staff pending adoption of final eligibility rule. Published for comment by the SEC in Release No. 34-38060 (December 18, 1996); 61 F.R. 68081 (December 26, 1996). Comment period expired January 16, 1997.
96-43
Amend Rules 4613, 4623, 4710, 4730, 6330, and IM-4613 to modify SOES and SelectNet to implement the SEC's Order Handling Rules. Published for comment by the SEC in Release No. 34-38008 (December 2, 1996); 61 F.R. 64549 (December 5, 1996). Comment period expired December 26, 1996. Amendment No. 1 filed with SEC on January 9, 1997. Partial approval granted by the SEC in Release No. 34-38156 (January 10, 1997); 62 F.R. 2415 (January 16, 1997).
Rule Filings Approved By The SEC
99-30
Amend Rule 4510 Entry Fee and Annual Fee for Foreign Issuers Quoted on the Nasdaq National Market. Notice of filing and immediate effectiveness published by the SEC in Release No. 34-41547 (June 22, 1999); 64 F.R. 34836 (June 29, 1999). Comment period expires July 20, 1999.
99-28
Amend Rule 1140 to make it consistent with the newly developed Web CRDSM and to implement the Rule on the planned date of deployment of Web CRD, which is August 16, 1999. Approved by the SEC in Release No. 34-41575 (June 29, 1999); 64 F.R. 36728 (July 7, 1999).
99-27
Amend Rule 10335 to extend the effectiveness of the Pilot Injunctive relief rule until January 3, 2000. Notice of filing and immediate effectiveness published by the SEC in Release No. 34-41532 (June 16,1999); 64 F.R. 33335 (June 22, 1999). Comment period expires July 13, 1999.
99-25
Amend Rule 7010 to establish a oneyear pilot program, commencing with the April 1, 1999 billing period, to reduce by 50 percent the fees for Nasdaq Level 1 market to nonprofessional users on either a per query or monthly basis. Notice of filing and immediate effectiveness published by the SEC in Release No. 34-41499 (June 9, 1999); 64 F.R. 32910 (June 18, 1999). Comment period expired on July 9, 1999.
99-22
Amend Rule 7010 to rescind the Limited Usage Fee (paragraph (f)). Published for comment by the SEC in Release No. 34-41432 (May 20, 1999); 64 F.R. 29075 (May 28, 1999). Comment period expired June 18, 1999. Approved by the SEC in Release No. 34-41571 (June 28, 1999); 64 F.R. 36415 (July 6, 1999).
99-19
Amend IM-10100 of the Code of Arbitration Procedure to facilitate use of dispute resolution programs offered by providers other than selfregulatoryorganizations. Notice offiling and immediate effectiveness published by the SEC in Release No. 34-41339 (April 28, 1999); 64 F.R.23887 (May 4, 1999). Comment period expired on May 26, 1999.
99-18
Amend Section 5.2 of the Nasdaq By-Laws to increase the maximum size of the Nasdaq Listing and Hearing Review Council from 11 to 18 members. Amendment No. 1 fil e d with the SEC on April 7, 1999. Notice of filing and immediate effectiveness published by the SEC in Release No. 34-41287 (April 14, 1999); 64 F.R. 19573 (April 21, 1999). Comment period expired May 12, 1999.
99-17
Amend Rule 7010(l) to extend, through March 31, 2000, the fees currently charged for the execution of transactions in SelectNet. Notice of filing and immediate effectiveness published by the SEC in Release No. 34-41314 (April 20, 1999); 64 F.R. 22664 (April 27, 1999). Comment period expired May 18, 1999.
99-14
Adopt IM-4300 to advise issuers of the Nasdaq rules to consider when issuing securities that convert into common stock based a conversion rate (Future Priced Securities). Notice of filing and immediate effectiveness published by the SEC in Release No. 34-41337 (April 27, 1999); 64 F.R. 23889 (May 4, 1999). Comment period expired May 26, 1999.
99-13
Amend Rule 7010 to establish a pilot program to provide a transaction credit to NASD members that exceed certain levels of trading activity in exchange-listed securities. Notice of filing and immediate effectiveness published by the SEC in Release No. 34-41174 (March 17, 1999); 64 F.R. 14034 (March 23, 1999). Comment period expired April 13, 1999.
98-96
Amend Form U-4, the Uniform Application for Securities Industry Registration or Transfer, and Form U-5, the Uniform Termination Notice for Securities Industry Termination. Comments solicited in Notice to Members (NtM) 98-101. Amendment No. 1 filed with the SEC on March 30, 1999. Amendment No. 2 fil e d with the SEC on April 7, 1999. Amendment No. 3 filed with the SEC on April 15, 1999. Published for comment by the SEC in Release No. 34-41326 (April 22, 1999); 64 F.R. 23366 (April 30, 1999). Comment period expired May 17, 1999. Amendment No. 4 filed with the SEC on April 28, 1999. Published by the SEC in Release No. 34-41371 (May 5, 1999); 64 F.R. 25945 (May 13, 1999). Comment period expired May 28, 1999. Amendment No. 5 fil e d with the SEC on June 8, 1999. Amendment No. 6 filed with the SEC on June 18, 1999. Approved by the SEC in Release No. 34-41560 (June 25, 1999); as of press time, this approval has not been published in the Federal Register.
98-88
Amend NASD Rule Series 4800: Code of Procedures for review of Nasdaq Listing Determinations. Published for comment by the SEC in Release No. 34-40874 (December 31, 1998); 64 F.R. 1258 (January 8, 1999). Comment period expired January 29, 1999. Approved by the SEC in Release No. 34-41367 (May 4, 1999); 64 F.R. 25942 (May 13, 1999).
98-59
Amend the trade reporting Rules 4632, 4642, 4652, 6620 with respect to "risk-less" principal transactions by Market Makers. Published for comment by the SEC in Release No. 34-40382 (August 28, 1998); 63 F.R. 47337 (September 4, 1998). Comment period expired September 25, 1998. Approved by the SEC in Release No. 34-41208 (March 24, 1999); 64 F.R. 15386 (March 31, 1999).
98-20
Amend Rule 11860 to permit members to use the facilities of a Qualified Electronic Vendor for electronic confirmation and affirmation of depository eligible transactions. Published for comment by the SEC in Release No. 34-39831 (April 6, 1998); 63 F.R. 18057 (April 13, 1998). Comment period expired May 4, 1998. Comment period extended by the SEC in Release No. 34-39944 (May 1, 1998); 63 F.R. 25531 (May 8, 1998). Comment period expired June 3, 1998. Approved by the SEC in Release No. 34-41390 (May 12, 1999); 64 F.R. 27016 (May 18, 1999).
Endnote
1 For purposes of this service, Nasdaq will rely on the definition of "Qualified Institutional Buyer" found in Rule 144A of the Securities Act of 1933.