Administration December 9, 2002

SEC Extends Market Relief

September 24, 2001(PLANSPONSOR.com) - The Securities and Exchange Commission (SEC) has extended the temporary relief granted last week following the terrorist attack on New York's financial district, for an additional five business days.
Reported by

Until September 28, 2001,

  • 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 10% 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

Letters

The SEC also issued three exemption letters. The first letter, to The Nasdaq Stock Market, extends 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.

In a letter to the Securities Industry Association, the SEC extended a deadline for reports from broker-dealers on order routing practices. Regulations currently require that brokers that route orders on behalf of customers 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.

Finally, in a letter to the NASD Small Firm Advisory Board, the SEC 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 year are exempt from quarterly reporting requirements.

Interpretive Release

Additionally, the SEC has issued an interpretive release, available on the agency’s Web site, 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

The Commission invites market participants to provide feedback on these measures and under what circumstances, if any, they should be extended.

The orders, exemption letters and interpretive releases are available on the Commission’s Web site, at www.sec.gov .

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