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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 240
Release No. 34-38139; File No. S7-30-95
RIN 3235-AG66
Order Execution Obligations
AGENCY: Securities and Exchange Commission
ACTION: Final Rule; Revised Effective Date; Revised Compliance
Dates
SUMMARY: The Securities and Exchange Commission is delaying the
effective date and compliance dates for Rule 11Ac1-4 ("Limit
Order Display Rule") and amendments to Rule 11Ac1-1 ("ECN
Amendment") (cumulatively "Order Execution Rules").
DATES: Effective Date: The effective date shall be January 20,
1997 for 240.11Ac1-4 and amendments to 240.11Ac1-1, published
on September 12, 1996 (61 FR 48290), and revised by rule
published on January 9, 1997, except that the effective date for
240.11Ac1-1(a)(25)(ii) remains April 10, 1997.
Compliance Dates: Each of the first three scheduled phase-in
dates for compliance with the Order Execution Rules are being
delayed one week, so that the first compliance date with respect
to exchange-traded securities and 50 Nasdaq stocks shall be
January 20, 1997, the phase-in date for an additional 100 Nasdaq
securities shall be February 7, 1997, and the phase-in date for
an additional 850 Nasdaq securities shall be February 28, 1997.
FOR FURTHER INFORMATION CONTACT: Betsy Prout Lefler, Special
Counsel, Gail Marshall-Smith, Special Counsel, or David
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Oestreicher, Special Counsel, (202) 942-0158, Division of Market
Regulation, Securities and Exchange Commission, 450 Fifth Street,
N.W., Mail Stop 5-1, Washington, D.C. 20549.
SUPPLEMENTARY INFORMATION:
I. Background
On August 28, 1996, the Securities and Exchange Commission
("Commission") adopted Rule 11Ac1-4,-[1]- the "Limit Order
Display Rule," and amendments to Rule 11Ac1-1, the "ECN
Amendment," to require OTC market makers and exchange specialists
to display certain customer limit orders, and to publicly
disseminate the best prices that the OTC market maker or exchange
specialist has placed in certain electronic communications
networks ("ECNs"), or to comply indirectly with the ECN Amendment
by using an ECN that furnishes the best market maker and
specialist prices therein to the public quotation
system.-[2]- In the Adopting Release, the Commission deemed
the effective date of these initiatives January 10, 1997.
Thereafter, the Commission modified the effective date of the
---------FOOTNOTES----------
-[1]- 17 CFR 240.11Ac1-4.
-[2]- The Commission also amended subsection
(a)(25)(ii) of the Quote Rule, thereby
expanding the coverage of the Quote Rule to
all exchange-traded securities. Thereafter,
the Commission determined that it was
appropriate to make this aspect of the
amendments effective April 10, 1997. See
Securities Exchange Act Release No. 38110,
infra note 3. The present order does not
change that date and, therefore, the
effective date of subsection (a)(25)(ii) of
the Quote Rule remains April 10, 1997.
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rules to January 13, 1997, and established compliance dates with
respect to the Limit Order Display Rule and the ECN Amendment so
that compliance with the rules would be phased-in over several
months.-[3]-
In order to allow market participants more time to adapt to
the Order Execution Rules and the National Association of
Securities Dealers' recently proposed amendments to its Small
Order Execution System, SelectNet, and other rules to accommodate
the Order Execution Rules, the Commission is hereby modifying the
effective dates and compliance dates as follows: (1) the
effective date for the Limit Order Display Rule and the
amendments to the Quote Rule adopted August 28, 1996, shall be
January 20, 1997, except that the effective date for the Quote
Rule definition of "subject security," 240.11Ac1-1(a)(25)(ii),
remains April 10, 1997; (2) each of the first three scheduled
phase-in dates for compliance with the Order Execution Rules are
being delayed one week, so that the first compliance date with
respect to exchange-traded securities and 50 Nasdaq stocks shall
be January 20, 1997, the phase-in date for an additional 100
Nasdaq
---------FOOTNOTES----------
-[3]- See Securities Exchange Act Release Nos.
37972 (November 22, 1996), and 38110 (January
2, 1997).
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securities shall be February 7, 1997, and the phase-in date for
an additional 850 Nasdaq securities shall be February 28, 1997.
The remaining compliance dates for the Limit Order Display Rule
and the ECN Amendment remain unchanged.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority, 17 CFR 200.30(a)(62).
Jonathan G. Katz
Secretary
January 8, 1997