Notice to Members 05-64

SEC Approves Amendments to IM-2110-2 to Require Members to Provide Price Improvement to Customer Limit Orders in Certain Circumstances and to Expand IM-2110-2 to Exchange-Listed Securities

Effective Date: January 2, 2006

On August 4, 2005, the Securities and Exchange Commission (SEC) approved amendments to Interpretive Material (IM)-2110-2, Trading Ahead of Customer Limit Order (commonly referred to as the "Manning Rule"), to require members to provide price improvement to customer limit orders in certain circumstances and expand the application of IM-2110-2 to exchange-listed securities.1 IM-2110-2, as amended, is set forth in Attachment A of this Notice. The amendments become effective on January 2, 2006.

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

1See Securities Exchange Act Release No. 52210 (August 4, 2005), 70 FR 46897 (August 11, 2005) (File No. SR-NASD-2004-089).