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U.S. Securities and Exchange Commission

Commission Provides Additional Relief to Market Participants

FOR IMMEDIATE RELEASE

2001-97

Washington, D.C., September 21, 2001 – Today, we have taken additional actions in response to concerns from market participants in the wake of last week's tragic events.

First, we extended for five business days - until September 28 - the temporary relief that we granted last week. Issuers may continue to repurchase their securities without meeting the volume and timing restrictions that ordinarily would apply, and without adverse accounting consequences under pooling of interests provisions. Directors, officers and ten percent shareholders may repurchase shares of their companies without certain restrictions contained in Section 16(b) of the Exchange Act. Amex specialists may continue to function like floor brokers due to space limitations in connection with Amex's relocation of part of its operations. Finally, mutual funds may continue to borrow from and lend to related parties.

We also issued three exemption letters today. The first letter, to The Nasdaq Stock Market, Inc., changes a deadline under Exchange Act Rule 11Ac1-5, adopted last year. That rule requires market centers that trade national market system securities to report monthly on the quality of trade executions. The first reports for Nasdaq securities, originally due in September, are now due by November 30, 2001, and will cover October trades.

In a letter to the Securities Industry Association, we extended a deadline for reports from broker-dealers on order routing practices. Under Exchange Act Rule 11Ac1-6, adopted last year, brokers that route orders on behalf of customers must make quarterly disclosures concerning the identity of the market centers to which they route a significant percentage of their orders, as well as information concerning the nature of their relationships with such market centers. The first reports, for the quarter July through September 2001, will now be due in November 2001.

In a letter to the NASD Small Firm Advisory Board, we granted an exemption from the disclosure requirements of Rule 11Ac1-6 to small broker-dealers. Firms that have routed on average 500, or fewer, customer orders per month during the preceding calendar quarter are exempt from quarterly reporting requirements.

Additionally, we have issued an interpretive release explaining how last week's market closures affect the application of two Commission rules. The two rules are Securities Act Rule 144(e), which governs how many shares of stock a corporate insider can sell in the open market, and Securities Exchange Act Rule 10b5-1, which allows people to trade securities even when they may have nonpublic information. Rule 144(e) requires insiders to calculate the average weekly reported volume of trading. The release allows insiders to ignore the week of September 11 in making that calculation. The release also gives insiders greater leeway concerning written plans to purchase or sell securities. This relief extends through September 28, 2001.

The orders, exemption letters and interpretive releases will be available on the Commission's website, at www.sec.gov. The Commission invites market participants to provide feedback on these measures and under what circumstances, if any, they should be extended

Regulatory and Interpretive Releases Regarding the Additional Relief

   *   Extension of emergency order concerning the American Stock Exchange LLC
   *   Extension of order granting exemptions from certain Investment Company Act provisions and rules
   *   Extension of emergency order taking temporary action to respond to market developments
   *   Interpretation: Calculation of Average Weekly Trading Volume under Rule 144 and Termination of a Rule 10b5-1 Trading Plan
   *   Letter re: Nasdaq Stock Market, Inc. Request for Extension of Exemption Under Rule 11Ac1-5
   *   Letter re: Securities Industry Association Request for Extension of Exemption Under Rule 11Ac1-6
   *   Letter re: NASD Small Firm Advisory Board Request for Exemption Under Rule 11Ac1-6

 

http://www.sec.gov/news/headlines/addedrelief.htm


Modified: 09/25/2001