<p>All Letters of Caution represent a determination that a violation has occurred, either of an NASD rule or a rule of the Securities and Exchange Commission over which NASD Regulation has jurisdiction to enforce. A Letter of Caution that results from a finding in a disciplinary proceeding initiated under the Rule 9200 Series of the NASD Code of Procedure is a sanction within the meaning of Procedural Rule 8310(a)(6), but a staff-issued Letter of Caution is not a sanction within the meaning of Procedural Rule 8310(a)(6).</p>
What is proper evidence of compliance with clock synchronization requirements pursuant to NASD Rule 6953?<br/>
A NASD member firm that is a proprietary trader and does not make markets is required to report orders in Nasdaq securities in compliance with OATS Rules 6951 through 6957.<br/>
Application of the OATS Rules to: partial executions, bunched orders, pegged orders, and negotiated orders.<br/>
This letter grants an exception to the OATS requirements to submit Cancel/Replace Reports and Route Reports for modifications made by a trader to orders routed to an ECN for handling/execution. Customer modifications to orders are specifically excluded from the interpretation.<br/>
<p>Exemptive request denied: the OATS Rules do not provide NASD Regulation with the authority to grant exemptions from any of the OATS requirements.</p>
<p>Application of the OATS rules to orders that are cancelled or replaced due to a merger of the member holding the orders.</p>
<p>Clarification of application of OATS rules to customer allocations of executions.</p>
<p>OATS Clock Synchronization Logs – Record Keeping Requirements.</p>
Market makers should consider the application of SEC Regulation M on market making activity where an issuer with no public market for its common stock is in the process of filing a registration statement and engages the market maker to file a Form 211 for quotation on the OTC Bulletin Board.<br/>
