NASD Notice to Members 99-29 - April 1999

SEC Approves Changes to Clearly Erroneous Trade Adjudication Procedures; Changes Effective April 26, 1999

Executive Summary

On March 17, 1999, 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.NASD Rule 11890, as now amended, limits the time period to request an adjudication of an erroneous transaction to 30 minutes for transactions that occur prior to 9:30 a.m. For erroneous transactions that occur between 9:30 a.m. and 9:59 a.m., market participants will still have up to one hour – until 10:30 a.m. – to request adjudication of erroneous transactions. The NASD and The Nasdaq Stock Market® (Nasdaq®) believe that the process for resolving erroneous transaction complaints will become more fair, efficient, and 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 April 26, 1999.

 

Questions concerning this Notice may be directed to Richard Bush, Associate Director, Nasdaq Market Operations, at (203) 385-6242; or John Malitzis, Assistant General Counsel, Office of General Counsel, The Nasdaq Stock Market, Inc., at (202) 728-8245.