NASD Notice to Members 04-68 - September 2004

SEC Approves Rule Amendment Requiring That ADF Market Participant Provide Advance Written Notice When Denying Access; Effective Date: October 20, 2004

Executive Summary

On August 18, 2004, the Securities and Exchange Commission (SEC) approved amendments to Rule 4300A to require Alternative Display Facility (ADF) Market Participants to provide written notice, via facsimile, personal delivery, courier, or overnight mail, at least 14 calendar days in advance to NASD's ADF Market Operations before denying direct electronic access to an NASD member firm.1 Upon receipt of the notice, ADF Market Operations will post the required notice on the ADF Web page to ensure that member firms have adequate time to make other routing or access arrangements, as necessary. Amended Rule 4300A also provides that only a Market Participant that is an electronic communications network (ECN) may lawfully deny access to its quotes, and may only do so in the limited circumstance where a broker-dealer fails to pay contractually obligated costs for access to the ECN's quotes.

 

Questions concerning this Notice may be directed to Patricia Albrecht, Assistant General Counsel, Office of General Counsel, Regulatory Policy and Oversight (202) 728-8026; or Elliot Levine, Chief Counsel, Markets, Services, and Information, at (202) 728-8405.