June 9, 2004
Out of respect for former president Ronald Reagan and in keeping with the announcements of the Securities and Exchange Commission and the U.S. financial markets, NASD will be closed for general business purposes on Friday, June 11, 2004. We understand that, although the Federal Reserve Board will be closed, its 12 regional banks will remain open, and not all banks will be closed. In addition, DTCC will be open to settle transactions. For securities lending, we understand that the business will continue to operate as usual on June 11th, even though the primary securities markets will be closed. It is understood that securities cannot be liquidated when the primary market where the securities are traded is closed.
The following guidance will assist NASD-designated firms in handling financial and operational matters relating to the market closing.
The Impact of Closure on Financial and Operational Requirements
For regulatory purposes, in regards to the applicable requirements pursuant to SEC Rules 15c3-1, 15c3-3 and 17a-5, and NASD Rule 2520, firms designated to NASD should treat Friday, June 11th, as a regular business day, unless otherwise noted.
|SEC Rule 15c3-1:||For aging purposes in determining net capital charges (fail to deliver, suspense charges, etc.), June 11th should be considered a regular business day. However, for the purposes of determining the due date for FOCUS Reports pursuant to SEC Rule 17a-5, June 11 will not be considered a business day. Therefore, the due date is June 24, 2004 for the FOCUS Report as of May 31, 2004.|
|SEC Rule 15c3-3:||
For weekly preparers, the reserve formula computation should be prepared as of close of business on Friday, June 11th, with the deposit requirement (if any) to be made by 10:00 a.m. on Tuesday, June 15th.
For purposes of possession or control requirements, if required, bank loan and stock loan recalls should be effected on June 11th.
|NASD Rule 2520:||For maintenance margin calls pursuant to NASD Rule 2520(f)(6), June 11th should be counted as a regular business day.|
For purposes of Regulation T and SEC Rule 15c3-3 extension requests:
|FRB Regulation T:||
Margin extension requests that are due on Friday, June 11th may be filed either Friday, June 11th or on Monday, June 14th.
For extensions required on DK'd COD transactions, broker/dealers should treat June 11th as a non-business day.
|SEC Rule 15c3-3:||Extension requests pursuant to SEC Rule 15c3-3 paragraph (m) that are due on Friday, June 11th may be filed either Friday, June 11th or on Monday, June 14th.|
On a case-by-case basis, NASD will consider a request for relief from regulatory requirements resulting from the closing of the securities markets on June 11, 2004. In cases where undue hardship can be demonstrated, members should contact their NASD District Office to discuss the specific relief sought and the reason for requesting such relief.
Questions relating to NASD Rule 2520 and FRB Regulation T should be directed to Susan DeMando, Director of Financial Operations, (202) 728-8411. All other questions should be directed to the staff of your District Office.