[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Rules and Regulations]
[Pages 63709-63710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30527]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 240
[Release No. 34-37972; File No. S7-30-95]
RIN 3235-AG66
Order Execution Obligations
AGENCY: Securities and Exchange Commission.
ACTION: Final Rule; Revised Compliance Dates.
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SUMMARY: The Securities and Exchange Commission is revising, for
certain over-the-counter (``OTC'') securities, the compliance dates
required by the recent adoption of Rule 11Ac1-4, the ``Display Rule,''
which generally requires OTC market makers and exchange specialists to
display customer limit orders.
DATES: The effective date for Rule 11Ac1-4 adopted by the Securities
and Exchange Commission, and published on September 12, 1996 (61 FR
48290) remains January 10, 1997. Effective December 2, 1996, the
compliance date to require the display of customer limit orders in only
50 of the 1,000 most actively traded OTC securities is January 10,
1997. The new compliance date for an additional 100 of these 1,000
securities is January 31, 1997, and the compliance date for the
remaining 850 most actively traded securities is February 21, 1997. The
remainder of the compliance dates are unchanged.
FOR FURTHER INFORMATION CONTACT: David Oestreicher, Special Counsel,
(202) 942-0158, Division of Market Regulation, Securities and Exchange
Commission, 450 Fifth Street, NW., Mail Stop 5-1, Washington, DC 20549.
SUPPLEMENTARY INFORMATION: On August 28, 1996, the Securities and
Exchange Commission (``Commission'') adopted
[[Page 63710]]
Rule 11Ac1-4,1 the ``Display Rule,'' to require OTC market makers
and exchange specialists to display certain customer limit orders for
covered securities if no stated exception applies.2
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\1\ 17 CFR 240.11Ac1-4.
\2\ Securities Exchange Act Release No. 37619A (September 6,
1996), 61 FR 48290 (September 12, 1996) (``Adopting Release'').
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As discussed in the Adopting Release, the Display Rule will become
effective on January 10, 1997. Implementation of the Display Rule will
be accomplished in phases, with the first phase of implementation
scheduled to begin on January 10, 1997. As originally envisioned by the
Commission, as of this date, the Display Rule would apply to all
exchange-traded securities and the 1,000 Nasdaq securities with the
highest average daily trading volume in the previous quarter. The
Commission initially provided a phase-in period for Nasdaq securities
because the display of limit orders in the OTC market represents a
significant change in OTC market practice. To ensure an orderly market
transition, the Commission believes that market professionals should be
provided a period of time in which to become accustomed, in a small
number of stocks, to the quote volume and array of prices that will be
reflected by the display of customer limit orders. The Commission has
determined, therefore, to require as of January 10, 1997, compliance
with the Display Rule with respect to only 50 of the 1,000 Nasdaq
securities with the highest average daily trading volume in the
previous quarter. These 50 securities will be identified by Nasdaq. On
January 31, 1997, compliance with the Display Rule will be required
with respect to an additional 100 securities identified by Nasdaq.
Compliance with the Display Rule for the remaining 850 of the 1000
Nasdaq securities with the highest daily trading volume in the previous
quarter, as determined by Nasdaq, will be required on February 21,
1997. For exchange-traded securities, the Commission believes that it
continues to be appropriate to require compliance with the Display Rule
as of January 10, 1997, except in cases where the security is a Nasdaq
security and is traded on an exchange pursuant to unlisted trading
privileges. In such cases, the security will be considered to be a
Nasdaq security, not an exchange-traded security, for the purpose of
determining the compliance date with the Display Rule.
All subsequent phase-in dates for compliance with the Display Rule
will continue to apply as described in the Adopting Release.
Specifically, the second phase-in date will be on March 28, 1997. From
this date forward, the Display Rule will apply to the next 1,500 Nasdaq
securities with the highest average daily trading volume over the
previous quarter. The third phase-in date will be on June 30, 1997.
From that date forward, the Display Rule will apply to the next 2,000
Nasdaq securities with the highest average daily trading volume over
the previous quarter. The final phase-in date will be on August 28,
1997. From that date forward, the Display Rule will apply to all
remaining Nasdaq securities.
Dated: November 22, 1996.
By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-30527 Filed 11-29-96; 8:45 am]
BILLING CODE 8010-01-P
