NASD Notice to Members 06-15 - April 2006

SEC Approves Expansion of NASD's Exemptive Authority under the OATS Rules; NASD Provides Additional Guidance Regarding Exemptive Relief and Encourages Exempted and Other Small Firms to Test the Enhanced OATS Web Interface

Executive Summary

In November 2005, NASD issued Notice to Members (NTM) 05-78 announcing Securities and Exchange Commission (SEC) approval of amendments to Rules 6950 through 6957 (OATS Rules) relating to the Order Audit Trail System (OATS), as well as questions and answers regarding the application of the amended OATS reporting requirements. Among other things, the amendments to the OATS Rules permit NASD to grant exemptive relief from the OATS reporting requirements in certain circumstances to members that meet specified criteria. On March 30, 2006, the SEC approved further amendments to the OATS Rules that expand NASD's OATS exemptive authority to include electronic recording requirements. As amended, NASD has the authority to grant exemptive relief from the OATS electronic recording and reporting requirements for manual orders to members that meet specified criteria. The exemptive authority, asamended, is set forth in Attachment A of this Notice and becomes effective on May 8, 2006.

 

Questions regarding this Notice may be directed to the Legal Section, Market Regulation, at (240) 386-5126; or Office of General Counsel, Regulatory Policy and Oversight, at (202) 728-8071.

 

For technical questions regarding OATS reporting, please contact the OATS Help Desk at (800) 321-NASD. Detailed information regarding all aspects of OATS Phase III, as well as general information relating to OATS, may be found on NASD's OATS Web site at www.finra.org/oats.