NASD Notice to Members 03-55 - September 2003

SEC Approves Changes to Rules on Reporting of Transactions through Electronic Communications Networks (ECNs); Changes Effective October 6, 2003

Executive Summary

On September 4, 2003, the Securities and Exchange Commission (SEC) approved changes to rules governing the reporting of transactions through NASDAQ's Automated Confirmation Transaction Service (ACT) in order to clarify the reporting requirements applicable to transactions conducted through electronic communications networks (ECNs). The new rules do not apply to trades reported through NASD's Trade Reporting and Comparison Service (TRACS).

 

The changes, which take effect October 6, 2003, describe the three methods that may be used by ECNs and/or their customers to report trades executed through an ECN's facilities. ECNs that use ACT to report some or all of the transactions executed through their facilities are required to file a notice of their trade-reporting methods prior to October 6, 2003. Please use Attachment A to file this notice. Notices must be filed with NASDAQ's MarketWatch Department, 9509 Key West Avenue, Rockville, MD 20850, Attention: Sheila Dagucon (or you may fax the notification to (240) 386-6050); and NASD's Market Regulation Department, 9509 Key West Avenue, Rockville, MD 20850, Attention: Alternative Trading Systems Group (or you may fax the notification to (240) 386-5139).

 

Questions regarding this Notice may be directed to Sheila Dagucon, NASDAQ MarketWatch, at (240) 386-6049; or John Yetter, NASDAQ Office of General Counsel, at (202) 912-3039.

 

The effective date of the amendments to ECN Trade Reporting Rules has been delayed until Monday, November 10, 2003. In addition, minor amendments to the Rules have been filed with the SEC on an immediately effective basis, and a new NTM reflecting these amendments will be available shortly. See Nasdaq Head Trader Alert 2003-140 at: www.nasdaqtrader.com/dynamic/newsindex/headtraderalerts_2003.stm.