Under the 49th: U.S. regulatory update

Order Protection Rules that require trading centers establish, maintain and enforce procedures to prevent execution of trades at inferior prices to those appearing on other markets. To warrant protection, quotations must be immediately and automatically accessible. Access Rules to require fair and nondiscriminatory access to quotations, limit access fees to harmonize pricing across trading centres, […]

By Philip Porado | June 29, 2005 | Last updated on June 29, 2005
3 min read
  • Order Protection Rules that require trading centers establish, maintain and enforce procedures to prevent execution of trades at inferior prices to those appearing on other markets. To warrant protection, quotations must be immediately and automatically accessible.
  • Access Rules to require fair and nondiscriminatory access to quotations, limit access fees to harmonize pricing across trading centres, and require each national exchange and association to adopt and enforce rules prohibiting members from behavior that locks and crosses automated quotations.
  • Sub-Penny Rules to prevent market participants from accepting, ranking or displaying orders, quotations or indications of interest below a one-penny increment.
  • Market Data Rules to update requirements for consolidating, distributing and displaying market information.

To read the full text of Reg NMS, please click here.

Self-Regulatory Organizations

The National Association Securities Dealers (NASD) wants to expand prohibitions on non-cash compensation to include sales and distribution of any security or type of security.

The self-regulator currently restricts such compensation as it relates to direct participation programs (DPPs), variable insurance contracts, investment company securities, and public offerings of real estate investment trusts (REITs) and other securities. While that list is fairly complete, NASD says it prefers to apply a blanket restriction.

NASD also plans to nix all product-specific cash and non-cash sales contests. It currently prohibits, with only a few exceptions, internal non-cash contests in connection with the sale of variable insurance contracts or investment company securities.

To read NASD’s notice on the proposed rule change, please click here.

Filed by Philip Porado, Advisor’s Edge, philip.porado@advisor.rogers.com

(06/29/05)

Philip Porado

  • Order Protection Rules that require trading centers establish, maintain and enforce procedures to prevent execution of trades at inferior prices to those appearing on other markets. To warrant protection, quotations must be immediately and automatically accessible.
  • Access Rules to require fair and nondiscriminatory access to quotations, limit access fees to harmonize pricing across trading centres, and require each national exchange and association to adopt and enforce rules prohibiting members from behavior that locks and crosses automated quotations.
  • Sub-Penny Rules to prevent market participants from accepting, ranking or displaying orders, quotations or indications of interest below a one-penny increment.
  • Market Data Rules to update requirements for consolidating, distributing and displaying market information.

To read the full text of Reg NMS, please click here.

Self-Regulatory Organizations

The National Association Securities Dealers (NASD) wants to expand prohibitions on non-cash compensation to include sales and distribution of any security or type of security.

The self-regulator currently restricts such compensation as it relates to direct participation programs (DPPs), variable insurance contracts, investment company securities, and public offerings of real estate investment trusts (REITs) and other securities. While that list is fairly complete, NASD says it prefers to apply a blanket restriction.

NASD also plans to nix all product-specific cash and non-cash sales contests. It currently prohibits, with only a few exceptions, internal non-cash contests in connection with the sale of variable insurance contracts or investment company securities.

To read NASD’s notice on the proposed rule change, please click here.

Filed by Philip Porado, Advisor’s Edge, philip.porado@advisor.rogers.com

(06/29/05)