NASD Notice to Members 97-57 - September 1997

NASD Interpretations of SEC Order Handling Rules, NASD Limit Order  Protection Rules, and Member Best Execution Responsibilities

Executive Summary

In the following document, the National Association of Securities Dealers, Inc. (NASD®), after consultation with staff of the Securities and Exchange Commission (SEC), is providing interpretive advice regarding a member’s best execution obligations when handling a  customer order, especially in light of the SEC’s Order Handling Rules and the NASD’s Limit Order Protection Rules. The Questions and Answers that follow are an attempt to provide members with answers to compliance questions raised following the implementation of the new Order Handling Rules. If members have additional questions regarding these issues, please contact Eugene A. Lopez, Director, Market Services, The Nasdaq Stock Market, Inc., at (202) 728-6998 or NASD Regulation, Inc.’s Market Regulation Department, at (800) 925-8156. Any requests for legal opinions regarding matters addressed in this Notice should be directed to the Nasdaq Office of General Counsel, at (202) 728-8294.