4120A. Trading Halts
This rule is no longer applicable. NASD Rule 4120A has been superseded by FINRA Rule 6120. Please consult the appropriate FINRA Rule.
(a) Authority to Initiate Halts In Trading on the Alternative Display Facility
Pursuant to the procedures set forth in paragraph (b), NASD shall:
(1) halt trading otherwise than on an exchange in the ADF in an ADF-eligible security whenever any market that has the authority to initiate a regulatory halt in the security imposes a trading halt, or suspends the listing, to:
(A) permit dissemination of material news;
(B) obtain information from the issuer relating to material news;
(C) obtain information relating to the issuer's ability to meet listing qualification requirements; or
(D) obtain any other information that is necessary to protect investors and the public interest.
(2) halt trading otherwise than on an exchange in the ADF in an ADF-eligible security when:
(A) extraordinary market activity in the security is occurring, including but not limited to the execution of a series of transactions for a significant dollar value at prices substantially unrelated to the current market for the security, as measured by the national best bid and offer; and
(B) NASD determines that such extraordinary market activity is likely to have a material effect on the market for the security; and
(C)(i) NASD determines that such extraordinary market activity is caused by the misuse or malfunction of an electronic quotation, communication, reporting, or execution system operated by, or linked to, NASD; or
(ii) After consultation with a national securities exchange trading the security, NASD determines that such extraordinary market activity is caused by the misuse or malfunction of an electronic quotation, communication, reporting, or execution system operated by, or linked to, such other national securities exchange.
(3) close the ADF to quotation and trade reporting activity whenever the ADF is unable to transmit real-time quotation or trade reporting information to the applicable Securities Information Processor. If the ADF closes trading pursuant to this subparagraph (3), members would not be prohibited from trading on other markets for which trading is not halted.
Members shall promptly notify NASD whenever they have knowledge of any matter related to a security or the issuer thereof that has not been adequately disclosed to the public or where they have knowledge of a regulatory problem relating to such security.
(b) Commencement and Termination of a Trading Halt
(1) In the event NASD determines that a basis exists under Rule 4120A(a) to initiate a trading halt or close the ADF, the commencement of the trading halt or closure will be effective simultaneously with appropriate notice.
(2) Trading shall resume upon appropriate notice that a trading halt or closure is no longer in effect.
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Amended by SR-NASD-2006-091 eff. March 5, 2007. Amended by SR-NASD-2005-087 eff. Aug. 1, 2006 Adopted by SR-NASD-2002-97 eff. July 29, 2002. |