The Securities and Exchange Commission (SEC) recently approved two NASD proposals to amend the NASD's options position-limit rule, Article III, Section 33(b)(3) of the NASD Rules of Fair Practice. On January 22, 1996, the SEC approved an NASD proposal to add two new position-limit tiers for option classes overlying equity securities that meet certain criteria for high liquidity. On December 29, 1995, the SEC approved an NASD proposal to expand the NASD's hedge exemption pilot program to permit the establishment of hedged positions up to three times the applicable basic position limit. The SEC also approved an extension of the pilot program until December 31, 1997.
Questions about this Notice should be directed to Joseph Alotto, NASD Market Surveillance, at (301) 590-6845, or Thomas R. Gira, Assistant General Counsel, at (202) 728-8957.