News Release

NASD Board Approves Preparation for Extended Trading Hours Calls on Industry to Proceed Jointly and Responsibly

Washington, D.C.—The National Association of Securities Dealers, Inc. (NASD®), today announced that its Board of Governors has approved a staff proposal to proceed with preparations to extend the trading hours of The Nasdaq Stock Market®.

However, NASD Chairman and Chief Executive Officer Frank G. Zarb cautioned that "piecemeal implementation of extended hours would be detrimental to the marketplace and therefore, whenever this trading begins, it should be with the full range of investor protections that are available during current trading hours." These protections include market transparency, broad quote dissemination, equal access to for investors, automatic execution, limit-order display and computerized regulatory review. Maintaining these investor protections will require that Nasdaq® and NASD Regulation® operate during whatever extended hours are determined.

The Board authorized staff to coordinate with the SEC and to continue to consult with members in order to achieve an orderly transition.

All of the market participants must work together to ensure that any extended trading hours session is open, efficient and fair. Among the issues to be worked out is the coordination of technology preparation by all of the major players so that the transition to an extended hours session is as smooth as possible. In addition, a program to assess the impact on small broker/dealers should be implemented, including steps necessary to facilitate the small broker/dealers’ participation in the expanded marketplace so that everyone benefits. A fact sheet is attached, addressing in a preliminary way, some of the many topics that need to be considered as the industry prepares for extended trading.

Though Nasdaq is proceeding to prepare for extended hours, it is likely that a full, responsible and coordinated effort will take some time. If alternative trading systems and others begin, initiate, or proceed to trade stocks in an extended hours trading session, then The Nasdaq Stock Market will expedite its implementation plans. In other words, if a portion of the industry acts to preempt an orderly transition, then The Nasdaq Stock Market is prepared to move quickly.

The NASD believes that a joint industry-wide effort is also needed so that investors are educated about the differences between the current trading day and an extended hours session, including, for example, the likelihood that there will be less liquidity in an after hours session.

The NASD is committed to working with all market participants and regulators to ensure a unified approach to an extended trading day. We invite the other markets, particularly the New York Stock Exchange, to join this effort so that we provide ultimate protection to investors and preserve market integrity.

The NASD is the largest securities-industry, self-regulatory organization in the United States and parent organization of NASD Regulation, Inc., and The Nasdaq-Amex Market Group, Inc. Through its regulatory subsidiary, the NASD develops rules and regulations, provides a dispute resolution forum, and conducts regulatory reviews of member activities for the protection and benefit of investors. Through The Nasdaq-Amex Market GroupSM, the NASD operates The Nasdaq Stock Market and the American Stock Exchange (Amex®). The NASD oversees the nation’s 5,600 brokerage firms and more than half a million registered brokers. Consumers can contact the NASD to obtain the disciplinary histories, as well as other selected background information, of member firms and individual brokers or to get information on how to lodge a complaint.

For more information about the NASD and its subsidiaries, please visit the following Web sites: www‌; www‌; the Nasdaq TraderSM site at www‌, or the Nasdaq-Amex NewsroomSM at www‌

Fact Sheet on Extended Hours

The extended hours concepts being addressed are still preliminary in many respects, but the following topics are being considered:

  • Likely extended trading hours would be 5:30 p.m. to 9:00 p.m. or 10:00 p.m., eastern standard time. To permit mutual funds to price portfolios and Nasdaq to calculate and disseminate closing bid, ask, last sale, and index values, there needs to be a clear break between normal trading hours and the extended hours session. Further considerations will be given as to when to end the session, 9:00 p.m. or 10:00 p.m.
  • Initially, trading would be limited to Nasdaq-100® issues.
  • To maintain the transparency of the market, which will continue to open for normal trading at 9:30 a.m., last-sale prices along with volume on any trades reported to the Automated Confirmation Transaction Service (ACTSM) would be displayed at 8:00 a.m. EST when ACT is normally available to process trades.
  • All customer protections such as the Order Handling and Manning rules would be in force during the extended hours session.
  • Market Makers participating in the session would be required to maintain firm, two-sided quotes.
  • All transactions would be reported and displayed in real time.
  • Trades would be identified as next day trades when sent to clearing (i.e., the trade date for transactions in a Monday evening session would be identified as next day [Tuesday] trades in reports sent to the National Securities Clearing Corporation).
  • SelectNetSM would be available for accessing Market Maker quotes and Electronic Communication Network (ECN) orders, but there would be no auto-execution capability through SOESSM or its successor system.
  • Securities subject to stock splits or stock dividends would be suspended from trading in the evening session.
  • All online surveillance tools would be operational in the after-hours session and Nasdaq regulatory departments would be staffed accordingly.
  • Participation in the evening session by Market Makers, ECNs and order-entry firms would be voluntary.