Notice to Members 99-61

SEC Approves Changes to Rule 4613--Firm Quotation Requirements

Effective Date: August 2, 1999

On June 22, 1999, the Securities and Exchange Commission (SEC) approved changes to National Association of Securities Dealers, Inc. (NASD®) Rule 4613(b) regarding quotation updates following execution of an order. NASD Rule 4613(b), as now amended, will require a Market Maker to disseminate an inferior quote whenever the Market Maker fails to execute the full size of an incoming order that is at least one normal unit of trading greater than the Market Maker’s published quotation size. The rule change will also modify IM-4613 to prohibit the use of automatic quote updating in violation of Rule 4613(b).

Questions concerning this Notice may be directed to the Office of General Counsel, The Nasdaq Stock Market, at (202) 728-8294; or the Legal Section, Market Regulation, NASD Regulation, Inc. (NASD Regulation®) at (301) 590- 6410.