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Tuesday, December 30, 2008

Equity Regulatory Alert #2008 - 43
Sponsored Access Update: Regulatory Alert #2008-040 is Withdrawn

Please Route To:

Head Traders; Technical Contacts; Compliance Officers

What you need to know:

  • NASDAQ is preparing a proposed rule change to adopt a new sponsored access rule.
  • Pending approval of the new rule, the guidance provided in Regulatory Alert #2008-40 about required sponsored access agreements has been withdrawn.

Who you should contact:

Important Note about NASDAQ OMX alerts:

  • Customers will begin receiving alerts via the NASDAQ OMX Trader website using the new self enrollment system effective January 1, 2009. If you wish to continue to receive NASDAQ OMX news alerts such as this one, you must complete the enrollment form and create a personal profile on the NASDAQ OMX Trader website.

What has been updated?

NASDAQ® and the Securities and Exchange Commission (SEC) are discussing the development of a new sponsored access rule that could be consistently applied across all markets. NASDAQ intends to file a proposed rule change in this regard, which will be published for notice and comment. NASDAQ would expect the rule to be adopted quickly.

Why is Regulatory Alert #2008-40 being withdrawn?

Pending approval of the new rule, the guidance provided in Regulatory Alert #2008-40 about required sponsored access agreements has been withdrawn.

What sponsored access agreements are required by NASDAQ?

NASDAQ Rule 4611(d) (Rule) governs sponsored access to The NASDAQ Stock Market LLC® (NASDAQ) and requires both a User Agreement for Sponsored Access and a Notice of Consent. However, Members are not required to submit the User Agreement or Notice of Consent at this time since a new rule is being developed.

What is the timing for the requirements?

  • Effective immediately, Members are not required to sign any sponsored access agreements, though a Supplemental MPID Request Form is still required.
  • Please disregard the guidance provided in Regulatory Alert #2008-40, which required Sponsoring Members to complete agreements by Wednesday, December 31, 2008, and to transition their Sponsored Participants to the new MPID(s) and ports by January 31, 2009.

What if I already submitted the agreements?

No action is required, though we will return them to you upon request.

Can I continue to enter into sponsored access arrangements? If so, what documents must I submit?

Yes, you may enter into sponsored access arrangements by submitting a Supplemental MPID Request Form and indicating that you wish to use the additional MPID for sponsored access.

Where can I get additional information?


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