NASD Notice to Members 07-31

NASD Rule Changes to Conform with Amendments to SEC Rule 10a-1 and Regulation SHO; Compliance Date: July 6, 2007

Executive Summary

NASD is issuing this Notice to advise firms and other interested parties of conforming NASD rule changes in light of the elimination of Rule 10a-1 under the Securities Exchange Act of 1934 (SEC Rule 10a-1) and amendments to Regulation SHO. Specifically, on July 5, 2007, NASD filed for immediate effectiveness a proposed rule change to: (1) repeal NASD Rule 5100 and IM-5100; (2) eliminate references to NASD Rule 5100 and SEC Rule 10a-1 from NASD rules; and (3) remove any “short exempt” marking requirements in NASD rules.1 NASD also is advising firms of temporary no-action relief from Rule 200(g) of Regulation SHO granted by the Securities and Exchange Commission (SEC) for “short exempt” transactions in certain circumstances.

The text of the affected NASD rules, as amended, is set forth in Attachment A of this Notice. The compliance date of the amendments is July 6, 2007, to coincide with the compliance date of the amendments to SEC Rule 10a-1 and Regulation SHO.

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

 

1 See File No. SR-NASD-2007-047.