NASD Notice to Members 97-46 - August 1997

SEC Approves Rule Prohibiting Payments for Market Making

Executive Summary

On July 3, 1997, in Release No. 34-38812 (SEC Release), the Securities and Exchange Commission (SEC) approved new NASD® Rule 2460 (Rule), which explicitly prohibits any payment by issuers or the issuers’ affiliates and promoters, directly or indirectly, to a member for publishing a quotation, acting as a market maker, or submitting an application in connection therewith. The Rule is intended, among other things, to assure that members act in an independent capacity when publishing a quotation or making a market in an issuer's securities. The new Rule is effective immediately. The text of the new Rule and Federal Register version of the SEC Release are attached.

 

Questions concerning this Notice should be directed to David A. Spotts, Office of General Counsel, NASD Regulation, Inc. (NASD RegulationSM) at (202) 728-8014.