These initiatives include the limit order display rule and Rules 11Ac1-5 and 11Ac1- 6.
In adopting the limit order display rule, the SEC went beyond ensuring that limit orders are treated fairly and contribute to quote competition; the SEC created an environment where market forces and competition would flourish to the benefit of investors.
NASDAQ dealers are more likely to improve prices with a smaller tick size because the Limit Order Display Rule subjects them to competition from limit order traders.
If the ASR stocks exhibit a significant reduction in spreads but the non-ASR stocks exhibit no change in spreads at all, the difference in spread changes between the OHR and non-OHR stocks could be attributed entirely to the ASR rather than the Limit Order Display Rule.
NASD Regulation determined that, from November 1997 to December 1999, Merrill Lynch on occasion violated the Securities and Exchange Commission (SEC) Limit Order Display Rule, as well as NASD rules pertaining to best execution, short sales, locked and crossed markets, and trade reporting.
In its review, NASD Regulation found that Merrill Lynch failed to comply with the SEC Limit Order Display Rule in connection with 41 customer limit orders.
200,000 for violations of the Securities and Exchange Commission (SEC) Limit Order Display Rule (Display Rule) continuing over a 21-month period, and for failing to establish, maintain, and enforce written supervisory procedures reasonably designed to achieve compliance with the Display Rule.
Enhancements to our surveillance systems, like the one announced today, enable NASD Market Regulation to protect investors by closely monitoring trading to ensure that firms comply with the SEC's Limit Order Display Rule and the NASD Limit Order Protection Rule," said Mary Schapiro, President, NASD Regulation.
Under the Limit Order Display Rule
market makers must reflect the size of limit orders they hold when they are at the inside market.
Over the years, Bradley has effectively articulated American Century's position on a variety of industry reform issues, including limit order display rules
adopted by the Securities & Exchange Commission, decimal quoting and trading of equity securities, and complete disclosure of investment advisor "soft dollar" practices.