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SEC Rule 605

(Formerly Rule 11Ac1-5)

SEC Rule 11Ac1-5 Redesignated as Rule 605 of Reg NMS:

On June 9, 2005, the SEC adopted Regulation NMS. Regulation NMS established new substantive rules designed to modernize and strengthen the regulatory structure of the U.S. equities markets. Regulation NMS, among other things, renumbers certain SEC rules, including SEC Rule 11Ac1-5. New SEC Rule 605 (formerly 11Ac1-5) requires FINRA to make available certain order execution information, facilitating the uniform public disclosure of order execution information by all market centers.

Background Information:

In November 2000, the SEC adopted Exchange Act Rule 11Ac1-5. Rule 11Ac1-5 is aimed at improving public disclosure of order execution quality. Under Rule 11Ac1-5, the SEC requires market centers that trade national market system securities to make monthly electronic reports. These reports include information about each market center's quality of executions on a stock-by-stock basis, including how market orders of various sizes are executed relative to the public quotes. These reports must also disclose information about effective spreads (the spreads actually paid by investors whose orders are routed to a particular market center). In addition, market centers must disclose the extent to which they provide executions at prices better than the public quotes to investors using limit orders.

The SEC staff has provided useful guidance that sets forth the views of the Division of Market Regulation regarding frequently asked questions about the rule. See SEC Staff Bulletin No. 12R, Frequently Asked Questions About Rule 11Ac1-5.

For further information, also see NASD's Notice to Members 01-16; NASD Notice to Members 01-22; NASD Notice to Members 01-30; and NASD Notice to Members 01-44.

The SEC has granted the following exemptions from SEC Rule 11Ac1-5:

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In addition, the SEC granted the following temporary exemptions from SEC Rule 11Ac1-5:

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