NASD Notice to Members 98-021 - February 1998

SEC Approves Amendments to Rule on Clearly Erroneous Transactions

Executive Summary

On January 14, 1998, the Securities and Exchange Commission (SEC) approved changes to National Association of Securities Dealers, Inc. (NASD®) Rule 11890 regarding the handling of clearly erroneous transactions. The NASD and The Nasdaq Stock MarketSM (Nasdaq®) believe that the process for resolving erroneous transaction complaints will become fairer, more efficient, and more timely, thereby promoting the maintenance of fair and orderly markets and exposing the parties to an allegedly erroneous transaction to less market risk. This Notice is being issued to alert members to the changes involved, which will become effective on Monday, February 23, 1998.