United States Government Publishing Office publisher pbl distributor dst United States National Archives and Records Administration Office of the Federal Register author aut Government Organization text government publication eng FR Regulatory Information 2005_register executive 2016-02-26 article Part II Rules and Regulations D09002ee1c8111f1c D09002ee1c8112018 United States Securities and Exchange Commission originator org United States Government Agency or Subagency The Securities and Exchange Commission ("Commission") is adopting rules under Regulation NMS and two amendments to the joint industry plans for disseminating market information. In addition to redesignating the national market system rules previously adopted under Section 11A of the Securities Exchange Act of 1934 ("Exchange Act"), Regulation NMS includes new substantive rules that are designed to modernize and strengthen the regulatory structure of the U.S. equity markets. First, the "Order Protection Rule" requires trading centers to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution of trades at prices inferior to protected quotations displayed by other trading centers, subject to an applicable exception. To be protected, a quotation must be immediately and automatically accessible. Second, the "Access Rule" requires fair and non-discriminatory access to quotations, establishes a limit on access fees to harmonize the pricing of quotations across different trading centers, and requires each national securities exchange and national securities association to adopt, maintain, and enforce written rules that prohibit their members from engaging in a pattern or practice of displaying quotations that lock or cross automated quotations. Third, the "Sub-Penny Rule" prohibits market participants from accepting, ranking, or displaying orders, quotations, or indications of interest in a pricing increment smaller than a penny, except for orders, quotations, or indications of interest that are priced at less than $1.00 per share. Finally, the Commission is adopting amendments to the "Market Data Rules" that update the requirements for consolidating, distributing, and displaying market information, as well as amendments to the joint industry plans for disseminating market information that modify the formulas for allocating plan revenues ("Allocation Amendment") and broaden participation in plan governance ("Governance Amendment"). 70 FR 37496 https://www.govinfo.gov/app/details/FR-2005-06-29/05-11802 05-11802 fr29jn05-14 RIN 3235-AJ18 8010-01-P Release No. 34-51808 File No. S7-10-04 https://www.govinfo.gov/app/details/FR-2005-06-29/05-11802 https://www.govinfo.gov/content/pkg/FR-2005-06-29/html/05-11802.htm https://www.govinfo.gov/content/pkg/FR-2005-06-29/pdf/05-11802.pdf Administrative Practice and Procedure Authority Delegations (Government Agencies) Organization and Functions (Government Agencies) Securities Reporting and Recordkeeping Requirements Brokers 149 p. 37496 37644 70 FR 37496 Title 17 Part 200 17 CFR Part 200 Title 17 Part 201 17 CFR Part 201 Title 17 Part 230 17 CFR Part 230 Title 17 Part 240 17 CFR Part 240 Title 17 Part 242 17 CFR Part 242 Title 17 Part 249 17 CFR Part 249 Title 17 Part 270 17 CFR Part 270 RIN 3235-AJ18 Regulation NMS; Federal Register Vol. 70, Issue RULE 05-11802 II SECURITIES AND EXCHANGE COMMISSION 2005-08-29 Release No. 34-51808 File No. S7-10-04 8010-01-P 05-11802 Final rules and amendments to joint industry plans.

The Securities and Exchange Commission ("Commission") is adopting rules under Regulation NMS and two amendments to the joint industry plans for disseminating market information. In addition to redesignating the national market system rules previously adopted under Section 11A of the Securities Exchange Act of 1934 ("Exchange Act"), Regulation NMS includes new substantive rules that are designed to modernize and strengthen the regulatory structure of the U.S. equity markets. First, the "Order Protection Rule" requires trading centers to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution of trades at prices inferior to protected quotations displayed by other trading centers, subject to an applicable exception. To be protected, a quotation must be immediately and automatically accessible. Second, the "Access Rule" requires fair and non-discriminatory access to quotations, establishes a limit on access fees to harmonize the pricing of quotations across different trading centers, and requires each national securities exchange and national securities association to adopt, maintain, and enforce written rules that prohibit their members from engaging in a pattern or practice of displaying quotations that lock or cross automated quotations. Third, the "Sub-Penny Rule" prohibits market participants from accepting, ranking, or displaying orders, quotations, or indications of interest in a pricing increment smaller than a penny, except for orders, quotations, or indications of interest that are priced at less than $1.00 per share. Finally, the Commission is adopting amendments to the "Market Data Rules" that update the requirements for consolidating, distributing, and displaying market information, as well as amendments to the joint industry plans for disseminating market information that modify the formulas for allocating plan revenues ("Allocation Amendment") and broaden participation in plan governance ("Governance Amendment").

Effective Date: August 29, 2005. Compliance Dates: For specific phase-in dates for compliance with the final rules and amendments, see section VII of this release. Order Protection Rule: Heather Seidel, Senior Special Counsel, at (202) 551-5608, Marc F. McKayle, Special Counsel, at (202) 551-5633, David Hsu, Special Counsel, at (202) 551- 5664, or Raymond Lombardo, Attorney, at (202) 551-5615; Access Rule: Heather Seidel, Senior Special Counsel, at (202) 551-5608, or David Liu, Attorney, at (202) 551-5645; Sub-Penny Rule: Michael Gaw, Senior Special Counsel, at (202) 551-5602; Market Data Rules, Allocation Amendment, and Governance Amendment: David Hsu, Special Counsel, at (202) 551-5664; Regulation NMS: Yvonne Fraticelli, Special Counsel, at (202) 551-5654; all of whom are in the Division of Market Regulation, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-6628. Administrative Practice and Procedure Authority Delegations (Government Agencies) Organization and Functions (Government Agencies) Securities Reporting and Recordkeeping Requirements Brokers Securities: National market system; joint industry plans; amendments, marketreg@sec.gov rule-comments@sec.gov http://www.nasdaqtrader.com http://www.nysedata.com/factbook/viewer_edition.asp?mode=table&key=2923&category=3 http://www.sec.gov http://www.sec.gov/news/openmeetings.shtml http://www.sec.gov/rules/proposed.shtml http://www.sec.gov/rules/proposed/s71004.shtml http://www.sec.gov/rules/proposed/s71004/mrmemo121504.pdf http://www.sec.gov/rules/proposed/s71004/oeamemo022404.pdf http://www.sec.gov/spotlight/regnms/analysis121504.pdf http://www.world-exchanges.org/WFE/home.asp?menu=315&document=2174 www.aei.com www.instinetgroup.com www.milliman.com www.nasdaqtrader.com/trader/ebrut/ourofferings/connectivity.shtm www.nysedata.com www.utpdata.com Vol. 70, no. 124 Office of the Federal Register, National Archives and Records Administration 2005-06-29 continuing daily deposited born digital 410 p. Table of Contents: AE 2.7: GS 4.107: AE 2.106: KF70.A2 https://www.govinfo.gov/app/details/FR-2005-06-29 P0b002ee18eb46442 0097-6326 0042-1219 0364-1406 769-004-00000-9 000582072 f:fr29jn05 https://www.govinfo.gov/app/details/FR-2005-06-29 https://www.govinfo.gov/content/pkg/FR-2005-06-29/pdf/FR-2005-06-29.pdf https://www.govinfo.gov/content/pkg/FR-2005-06-29/xml/FR-2005-06-29.xml fdlp 37249 37646 DGPO 2016-02-26 2024-06-06 FR-2005-06-29 machine generated eng FR FR-2005-06-29 70 124