December 29, 2006
Out of respect for former President Gerald R. Ford, who also served on NASD's Board of Governors from January 1999 through May 2000, 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 Tuesday, January 2, 2007. DTCC will be open to settle transactions.
On July 6, 2005, NASD issued Notice to Members 05-47, which details guidelines to be followed by member firms in the event of an unexpected closure of exchanges and securities marketplaces.
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 regard 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 Tuesday, January 2, 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.), January 2 should be considered a regular business day.|
|SEC Rule 15c3-3:||
The reserve formula computation should be prepared as of close of business on Friday, December 29, 2006, with the deposit requirement (if any) to be made by 10:00 a.m. on Wednesday, January 3. For purposes of possession or control requirements, if required, bank loan and stock loan recalls should be effected on January 2.
|FRB Regulation T:||
Extensions (cash and margin accounts) due on Tuesday, January 2, can be filed either on that day or on Wednesday, January 3, (as of January 2). All subsequent extensions should be filed on the normal due date, counting January 2 as a business day. However, if the request for an extension has expired or is denied, January 2 should be treated as a non-business day since securities cannot be liquidated when the primary market where the securities are traded is closed. The same procedure should be followed for paragraph (m) extensions pursuant to SEC Rule 15c3-3.
Extensions required on DK'd COD transactions due on January 2 can be filed either on January 2 or on Wednesday, January 3 (as of January 2). If January 2 falls within the granted two-day extension period, then member firms may treat January 2 as either a business day or a non-business day. All subsequent extensions should be filed on the normal due date, counting January 2 as a business day. However, if the request for an extension has expired or is denied, January 2 should be treated as a non-business day since securities cannot be liquidated when the primary market where the securities are traded is closed.
|NASD Rule 2520:||For maintenance margin calls pursuant to NASD Rule 2520(f)(6), January 2 should be counted as a regular business day.|
|SEC Rule 17a-5:||For purposes of determining the December 2006 FOCUS Report due date, January 2 should not be considered as a business day.|
For securities lending, it is understood that the business will continue to operate as usual on January 2, even though the primary securities markets will be closed.
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 January 2. 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 this notice should be directed to Susan M. DeMando, AVP and Director of Financial Operations, (202) 728-8411.