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89-15 Adoption of Rule Amendment to Permit Withdrawal of Quotations from NASDAQ for Market-Maker Vacations — Effective December 20, 1988
*These are suggested departments only. Others may be appropriate for your firm.
The Securities and Exchange Commission (SEC) recently approved an amendment to Paragraph (b), Part VI, Section 7, Schedule D to the NASD By-Laws. The amendment permits market makers with three or fewer NASDAQ Level 3 terminals to receive excused withdrawals from NASDAQ for vacations, provided the request is submitted to the NASD in writing 20 business days prior to the effective date of withdrawal from the NASDAQ system and the request includes a list of securities for which withdrawal is requested.
BACKGROUND AND SUMMARY
The SEC approved on June 9, 1988 amendments to Part VI, Schedule D to the NASD By-Laws setting forth requirements applicable to NASDAQ market makers1. In part, the rule amendments deleted vacations from the list of reasons for which NASDAQ market makers would be permitted to withdraw their quotations from the NASDAQ system. Since the rule amendments became effective, a number of market makers have written to the NASD to request that Schedule D be amended to permit excused withdrawals for vacations. The market makers requesting the rule amendment were from smaller firms that believe the Schedule D provisions on excused withdrawals place them at a competitive disadvantage to larger firms that are able to provide adequate coverage for traders who are on vacation. After considering the market makers' request, the NASD concluded that firms with a limited number of personnel are most affected by the excused withdrawal provisions under Schedule D because these firms are unable to assign stocks to other experienced personnel during a trader's absence. The NASD thus filed a proposed rule amendment with the SEC October 31, 1988. The rule amendment was approved by the SEC December 20, 1988.
The new rule change permits market makers with three or fewer NASDAQ Level 3 terminals to receive excused withdrawals from NASDAQ for vacation, provided that the request for withdrawal is submitted to the NASD in writing 20 business days prior to the effective date of withdrawal from the NASDAQ system and the request includes a list of the securities for which withdrawal is requested.
Any questions regarding this notice may be directed to Eneida Rosa, NASD Assistant General Counsel, at (202) 728-8284.
SCHEDULE D TO THE NASD BY-LAWS
(Note: New language is underlined.)
Requirements Applicable to NASDAQ Market Makers
Sec. 7 Withdrawal of Quotations
1 File No. SR-NASD-88-1, Securities Exchange Act Release No. 34-25791.