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General 9 Regulation
Section 1. General Standards

(a) Standards of Commercial Honor and Principles of Trade

A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.

(b) Prohibition Against Trading Ahead of Customer Orders

Nasdaq members and persons associated with a member shall comply with FINRA Rule 5320 as if such Rule were part of Nasdaq's rules.

For purposes of this Rule: (1) references to Rules 4512, 5310, 5320, and 7440 shall be construed as references to Nasdaq Rules 4512A, 5310A, 5320A, and Equity 5, Section 4, respectively; (2) Rule 5320.02(b) and the reference to Rule 6420 therein shall be disregarded, (3) references to "FINRA" shall be construed as references to "Nasdaq". (4) Nasdaq members and persons associated with a member relying upon the exemption set forth in FINRA Rule 5320.03 shall comply with the reporting requirements stated therein. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with Nasdaq Rule 5320A.03 by complying with FINRA Rule 5320.03 as written, including, for example, reporting requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under Nasdaq Rule 5320A.03 are being performed by FINRA on behalf of Nasdaq.

(c) Front Running Policy

Nasdaq members and persons associated with a member shall comply with FINRA Rule 5270 as if such Rule were part of Nasdaq's rules.

(d) Trading Ahead of Research Reports

No member shall use any facility of Nasdaq to establish, increase, decrease or liquidate an inventory position in a security or a derivative of such security based on nonpublic advance knowledge of the content or timing of a research report in that security.

(1) A member must establish, maintain and enforce policies and procedures reasonably designed to restrict or limit the information flow between research department personnel, or other persons with knowledge of the content or timing of a research report, and trading department personnel, so as to prevent trading department personnel from utilizing non-public advance knowledge of the issuance or content of a research report for the benefit of the member or any other person.

(e) Anti-Intimidation / Coordination

Nasdaq is issuing this interpretation to codify a longstanding policy. It is conduct inconsistent with just and equitable principles of trade for any member or person associated with a member to coordinate the prices (including quotations), trades, or trade reports of such member with any other member or person associated with a member; to direct or request another member to alter a price (including a quotation); or to engage, directly or indirectly, in any conduct that threatens, harasses, coerces, intimidates, or otherwise attempts improperly to influence another member or person associated with a member. This includes, but is not limited to, any attempt to influence another member or person associated with a member to adjust or maintain a price or quotation, whether displayed on any facility operated by Nasdaq or otherwise, or refusals to trade or other conduct that retaliates against or discourages the competitive activities of another market maker or market participant. Nothing in this interpretation respecting coordination of quotes, trades, or trade reports shall be deemed to limit, constrain, or otherwise inhibit the freedom of a member or person associated with a member to:

(1) set unilaterally its own bid or ask in any Nasdaq security or other exchange-listed security traded on Nasdaq pursuant to unlisted trading privileges, the prices at which it is willing to buy or sell any Nasdaq or other exchange-listed security, and the quantity of shares of any Nasdaq or other exchange-listed security that it is willing to buy or sell;

(2) set unilaterally its own dealer spread, quote increment, or quantity of shares for its quotations (or set any relationship between or among its dealer spread, inside spread, or the size of any quote increment) in any Nasdaq or other exchange-listed security;

(3) communicate its own bid or ask, or the prices at or the quantity of shares in which it is willing to buy or sell any Nasdaq or other exchange-listed security to any person, for the purpose of exploring the possibility of a purchase or sale of the Nasdaq or other exchange-listed security, and to negotiate for or agree to such purchase or sale;

(4) communicate its own bid or ask, or the price at or the quantity of shares in which it is willing to buy or sell any Nasdaq or other exchange-listed security, to any person for the purpose of retaining such person as an agent or subagent for the member or for a customer of the member (or for the purpose of seeking to be retained as an agent or subagent), and to negotiate for or agree to such purchase or sale;

(5) engage in any underwriting (or any syndicate for the underwriting) of securities to the extent permitted by the federal securities laws;

(6) take any unilateral action or make any unilateral decision regarding the market makers with which it will trade and the terms on which it will trade unless such action is prohibited by the second and third sentences of this Interpretation; and

(7) deliver an order to another member for handling, provided, however, that the conduct described in (1) through (7) is otherwise in compliance with all applicable law.

(f) Confirmation of Callable Common Stock. Nasdaq members and persons associated with a member shall comply with FINRA Rule 2232 as if such Rule were part of the Nasdaq rules.

(g) Use of Manipulative, Deceptive or Other Fraudulent Devices

No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.

(h) Interfering With the Transfer of Customer Accounts in the Context of Employment Disputes

Exchange members and persons associated with a member shall comply with FINRA Rule 2140 as if such Rule were part of the Exchange's rules.

(i) For purposes of this Rule, references to Rule 11870 shall be construed as references to Nasdaq Rule 11870.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended Jan. 29, 2020 (SR-NASDAQ-2020-006); amended Feb. 19, 2020 (SR-NASDAQ-2020-010); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 2. Customers' Securities or Funds

(a) Nasdaq Members and persons associated with a member shall comply with FINRA Rule 2150 as if such Rule were part of Nasdaq's Rules.

(b) Nothing in FINRA Rule 2150, as applied to Nasdaq members and their associated persons, shall be construed to authorize any Nasdaq member or associated person to act in a manner inconsistent with Section 11(a) of the Act.

(c) Nasdaq Members and persons associated with a member shall comply with FINRA Interpretive Material 2150 as if such Rule were part of Nasdaq's Rules.

(d) For purposes of this Rule, references to Rule 2150 shall be construed as references to General 9, Section 2.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 3. Communications with the Public

(a) Nasdaq members and persons associated with a member shall comply with FINRA Rule 2210 (except FINRA Rule 2210(c)) as if such Rule were part of Nasdaq's Rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with General 9, Section 3 by complying with FINRA Rule 2210 as written, including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under General 9, Section 3 are being performed by FINRA on Nasdaq's behalf.

(b) Limitations on Use of the Exchange's Name. Members may indicate membership in Nasdaq in any communication with the public, provided that the communication complies with the applicable standards of General 9, Section 3 and neither states nor implies that Nasdaq, or any other corporate name or facility affiliated with Nasdaq, or any other regulatory organization, endorses, indemnifies, or guarantees the member's business practices, selling methods, the class or type of securities offered, or any specific security.

(c) references to a "FINRA membership" shall be construed as references to a "Nasdaq membership," and

(d) references to Rule 4512 shall be construed as references to General 9, Section 45, and references to Rule 3110 shall be construed as references to General 9, Section 20.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 4. Reserved.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 5. Telemarketing

Nasdaq members and persons associated with a member shall comply with FINRA Rule 3230 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

(a) Nasdaq Members shall comply with FINRA Rule 2251 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule, the guidance adopted by FINRA with respect to reasonable rates of reimbursement as provided in FINRA Rule 2251 and the accompanying supplementary material is hereby adopted as the guidance of the Nasdaq Board.

(c) For purposes of this Rule:

(1) references to FINRA shall be construed as references to Nasdaq, and

(2) references to FINRA Rule 2251 shall be construed as references to General 9, Section 6.

(d) Notwithstanding the foregoing, a Nasdaq Member that is not the beneficial owner of a security registered under Section 12 of the Act is prohibited from granting a proxy to vote the security in connection with a shareholder vote on the election of a member of the board of directors of an issuer (except for a vote with respect to the uncontested election of a member of the board of directors of any investment company registered under the Investment Company Act of 1940), executive compensation, or any other significant matter, as determined by the Commission, by rule, unless the beneficial owner of the security has instructed the member to vote the proxy in accordance with the voting instructions of the beneficial owner.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 7. Disclosure of Financial Condition, Control Relationship with Issuer and Participation or Interest in Primary or Secondary Distribution

(a) Nasdaq Members shall comply with FINRA Rule 2261 as if such Rule were part of Nasdaq's Rules.

(b) Nasdaq Members shall comply with FINRA Rule 2262 as if such Rule were part of Nasdaq's Rules.

(c) Nasdaq Members shall comply with FINRA Rule 2269 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 8. SIPC Information

Nasdaq Members shall comply with FINRA Rule 2266 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 9. Fairness Opinions

Nasdaq Members and persons associated with a member shall comply with FINRA Rule 5150 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 10. Recommendations to Customers (Suitability)

(a) Nasdaq members and associated persons of a member shall comply with FINRA Rule 2111 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule:

(1) References to Rules 2111 and 4512 shall be construed as references to Nasdaq Rules 2111A and 4512A, respectively;

(2) References to "FINRA's rules" shall be construed as references to "Nasdaq Rules"; and

(3) References to IM-2210-6 shall be disregarded, and no comparable Nasdaq Rule shall apply to activities of Nasdaq Members in connection with investment analysis tools.

(c) Know Your Customer. Nasdaq members shall comply with FINRA Rule 2090 as if such rule were part of Nasdaq's rules

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 11. Best Execution and Interpositioning

(a) Nasdaq Members shall comply with FINRA Rule 5310 as if such Rule were part of Nasdaq's Rules.

For purposes of this Rule: (1) References to FINRA Rule 2121 and its supplementary material shall be disregarded; (2) References to FINRA members shall be construed as references to Nasdaq members; and (3) References to FINRA shall be construed as references to Nasdaq.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 12. Customer Account Statements

(a) Nasdaq Members shall comply with FINRA Rule 2231 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule, references to Rule 2310, Rule 4512, and Rule 11860 shall be construed as references to Nasdaq Rule 2310A, General 9, Section 45, and Nasdaq Rule 11860.

(c) Pursuant to the Rule 9600 Series, Nasdaq may exempt any member from the provisions of this Rule for good cause shown.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 13. Margin Disclosure Statement

(a) Nasdaq Members shall comply with FINRA Rule 2264 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule, references to Rule 4512 shall be construed as references to General 9, Section 45.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 14. Approval Procedures for Day-Trading Accounts

(a) Nasdaq Members shall comply with FINRA Rule 2130 as if such Rule were part of Nasdaq's Rules. For purposes of this Rule, references to Rule 2361 and Rule 3110 shall be construed as references to Nasdaq Rule 2361 and Nasdaq Rule 3110.

(b) Day-Trading Risk Disclosure Statement. Nasdaq Members shall comply with FINRA Rule 2270 as if such Rule were part of Nasdaq's Rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with General 9, Section 14 by complying with FINRA Rule 2270 as written. Accordingly, Nasdaq members may submit an alternative disclosure statement to the FINRA's Advertising Department as provided in the FINRA Rule. Functions performed by FINRA, FINRA departments, and FINRA staff under FINRA Rule 2270 are being performed by FINRA on Nasdaq's behalf.

(c) For purposes of this Rule, references to Rule 2360 and Rule 3110 shall be construed as references to General 9, Sections 14 and 30.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 15. Borrowing From or Lending to Customers

Nasdaq Members and persons associated with a member shall comply with FINRA Rule 3240 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 16. Charges for Services Performed

Nasdaq Members shall comply with FINRA Rule 2122 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 17. Net Transactions with Customers

(a) Nasdaq Members shall comply with FINRA Rule 2124 as if such Rule were part of the Nasdaq Rules.

(b) For purposes of this Rule, references to Rule 4511 and 4512 shall be respectively construed as references to General 9, Sections 30 and 45.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 18. Payments for Market Making

(a) No member or person associated with a member shall accept any payment or other consideration, directly or indirectly, from an issuer of a security, or any affiliate or promoter thereof, for publishing a quotation, acting as market maker in a security, or submitting an application in connection therewith.

(b) The provisions of paragraph (a) shall not preclude a member from accepting:

(1) payment for bona fide services, including, but not limited to, investment banking services (including underwriting compensation and fees); and

(2) reimbursement of any payment for registration imposed by the Securities and Exchange Commission or state regulatory authorities and for listing of an issue of securities imposed by a self-regulatory organization.

(c) For purposes of this Rule, the following terms shall have the stated meanings:

(1) "affiliate"

(A) The term "affiliate" shall mean a company which controls, is controlled by, or is under common control with a member;

(B) The term affiliate is presumed to include, but is not limited to, the following for purposes of subparagraph (A), above:

(i) a company will be presumed to control a member if the company beneficially owns 10 percent or more of the outstanding voting securities of a member which is a corporation, or beneficially owns a partnership interest in 10 percent or more of the distributable profits or losses of a member which is a partnership;

(ii) a member will be presumed to control a company if the member and persons associated with the member beneficially own 10 percent or more of the outstanding voting securities of a company which is a corporation, or beneficially own a partnership interest in 10 percent or more of the distributable profits or losses of a company which is a partnership;

(iii) a company will be presumed to be under common control with a member if:

a. The same natural person or company controls both the member and company by beneficially owning 10 percent or more of the outstanding voting securities of a member or company which is a corporation, or by beneficially owning a partnership interest in 10 percent or more of the distributable profits or losses of a member or company which is a partnership; or

b. A person having the power to direct or cause the direction of the management or policies of the member or the company also has the power to direct or cause the direction of the management or policies of the other entity in question.

(C) The provisions of subparagraphs (A) and (B) hereof notwithstanding, none of the following shall be presumed to be an affiliate of a member for purposes of this Rule:

(i) an investment company registered with the Commission pursuant to the Investment Company Act of 1940, as amended;

(ii) a "separate account" as defined in Section 2(a)(37) of the Investment Company Act of 1940, as amended;

(iii) a "real estate investment trust" as defined in Section 856 of the Internal Revenue Code;

(iv) a "direct participation program" as defined in Rule 2810A; and

(v) a corporation, trust, partnership or other entity issuing financing instrument-backed securities which are rated by a nationally recognized statistical rating organization in one of its four highest generic rating categories.

(2) "promoter" means any person who founded or organized the business or enterprise of an issuer, is a director or employee of an issuer, acts or has acted as a consultant, advisor, accountant or attorney to an issuer, is the beneficial owner of any of an issuer's securities that are considered "restricted securities" under Rule 144, or is the beneficial owner of five percent (5%) or more of the public float of any class of an issuer's securities, and any other person with a similar interest in promoting the entry of quotations or market making in an issuer's securities; and

(3) "quotation" shall mean any bid or offer at a specified price with respect to a security, or any indication of interest by a member in receiving bids or offers from others for a security, or an indication by a member that he wishes to advertise his general interest in buying or selling a particular security.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 19. Discretionary Accounts

(a) Nasdaq Members shall comply with FINRA Rule 3260 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of applying this Rule, references to Rule 3110 and Rule 4512 shall be construed as references to General 9, Sections 20 and 45, respectively.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 20. Supervision

(a) Each member shall establish and maintain a system to supervise the activities of each registered representative and associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations and with applicable Nasdaq rules. Nasdaq members shall comply with FINRA Rule 3110 as if such Rule were part of Nasdaq's Rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with General 9, Section 20 by complying with FINRA Rule 3110 as written, including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under General 9, Section 20 are being performed by FINRA on behalf of Nasdaq.

(b) For purposes of this Rule:

(1) references to "FINRA Rules", "rules of FINRA", or "Rules of the Financial Industry Regulatory Authority" shall be construed as references to "Nasdaq Rules",

(2) the term "registered person" in FINRA Rule 3170(a)(1) shall be defined as any person registered with Nasdaq as a representative, principal, or assistant representative pursuant to the General 4, Section 1.1200 Series of the General Equity and Options Rules,

(3) references to Article V, Section 3 of FINRA's By-Laws shall be construed as references to General 4, Section 1.1210,

(4) references to Rule 2210 and Rule 3110 shall be construed as references to General 9, Sections 3 and 30, and

(5) references to registration with FINRA or the Financial Industry Regulatory Authority shall be construed as references to registration with Nasdaq.

(c) Pursuant to General 5, Section 2 Nasdaq may in exceptional circumstances, taking into consideration all relevant factors, exempt any member unconditionally or on specified terms and conditions from the requirements contained in paragraph (b)(2) of FINRA Rule 3170, as applied to Nasdaq members through General 9, Section 20. A member seeking an exemption must file a written application pursuant to General 5, Section 2 within 30 days after receiving notice or obtaining actual knowledge that it meets one of the criteria in FINRA Rule 3170(a)(5)(A). A member that meets one of the criteria in Rule 3170(a)(5)(A) for the first time may elect to reduce its staffing levels pursuant to the provisions of FINRA Rule 3170(c) or, alternatively, to seek an exemption hereunder, as appropriate; such a member may not seek relief from the Rule by both reducing its staffing levels pursuant to Rule 3170(c) and requesting an exemption.

(d) Standards for Reasonable Review. Nasdaq members and persons associated with a member shall comply. Nasdaq members and persons associated with a member shall comply with FINRA Rule 3110, Supplementary Material .12 as if such Supplementary Material were part of Nasdaq's Rules.

For purposes of this Rule:

(1) references to Rule 3110 shall be construed as references to General 9,S ection 20; and

(2) references to "FINRA Rules" shall be construed as references to "Nasdaq Rules".

(e) Guidance on Heightened Supervision Requirements. Nasdaq members shall comply with NASD Notice to Members 97-19 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 21. Supervisory Control System, Annual Certification of Compliance and Supervisory Processes

(a) Members and persons associated with a member shall comply with FINRA Rule 3120 as if such Rule were part of Nasdaq's rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with Nasdaq General 9, Section 21 by complying with FINRA Rule 3120 as written, including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under General 9, Section 21 are being performed by FINRA on behalf of Nasdaq.

(b) For purposes of this Rule, references to "FINRA Rules" shall be construed as references to "Nasdaq Rules".

(c) Annual Certification of Compliance and Supervisory Processes. Nasdaq Members and persons associated with a member shall comply with FINRA Rule 3130 as if such Rule were part of Nasdaq's Rules.

(d) For purposes of this Rule:

(1) references to "FINRA Rules" shall be construed as references to "Nasdaq Rules",

(2) references to FINRA Rule 3130 and Rule 2010 shall be construed as references to General 9, Section 21 and General 9, Section 1(a),

(3) references to "FINRA members" shall be construed as references to "Nasdaq Members",

(4) references to "the FINRA Board of Governors" shall be construed as references to "the Board of Directors of The Nasdaq Stock Market LLC", and

(5) references to "MSRB rules" shall be deleted.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 22. Reserved.

 

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 23. Outside Business Activities of an Associated Person

(a) Nasdaq Members and persons associated with a member shall comply with FINRA Rule 3270 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule, references to Rule 3280 shall be construed as references to General 9, Section 24.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 24. Private Securities Transactions of an Associated Person

(a) Nasdaq Members and persons associated with a member shall comply with FINRA Rule 3280 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule:

(1) references to Rule 3210 shall be construed as references to General 9, Section 25, and

(2) references to "immediate family members (as defined in Rule 5130)" shall be construed to mean a person's parents, mother-in-law or father-in-law, spouse, brother or sister, brother-in-law or sister-in-law, son-in-law or daughter-in-law, and children, and any other individual to whom the person provides material support.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 25. Transactions for or by Associated Persons

Nasdaq Members and persons associated with a member shall comply with FINRA Rule 3210 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 26. Influencing or Rewarding Employees of Others

Nasdaq Members and persons associated with a member shall comply with FINRA Rule 3220 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 27. Reporting Requirements

(a) Nasdaq Members and persons associated with a member shall comply with FINRA Rule 4530 (excluding FINRA Rule 4530(h)) as if such Rule were part of Nasdaq's Rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with this Rule by complying with FINRA Rule 4530 as written (excluding Rule 4530(h), including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under this Rule are being performed by FINRA on behalf of Nasdaq.

(b) For purposes of this Rule, the requirement of FINRA Rule 4530(e) to respond to FINRA with respect to any customer complaint, examination, or inquiry shall be construed as a requirement to respond to FINRA and Nasdaq.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 28. Disclosure to Associated Persons When Signing Form U4

Nasdaq Members shall comply with FINRA Rule 2263 as if such Rule were part of Nasdaq's Rules. In lieu of incorporating in the written statement the language in paragraph (2) of FINRA Rule 2263, members shall include the following provision: A claim alleging employment discrimination, including a sexual harassment claim, in violation of a statute is not required to be arbitrated under Nasdaq rules. Such a claim may be arbitrated under Nasdaq rules only if the parties have agreed to arbitrate it, either before or after the dispute arose. The rules of other arbitration forums may be different.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 29. Transactions Involving Nasdaq Employees

(a) When a member has actual notice that a Nasdaq employee has a financial interest in, or controls trading in, an account, the member shall promptly obtain and implement an instruction from the employee directing that duplicate account statements be provided by the member to Nasdaq.

(b) No member shall directly or indirectly make any loan of money or securities to any Nasdaq employee. Provided, however, that this prohibition does not apply to loans made in the context of disclosed, routine banking and brokerage agreements, or loans that are clearly motivated by a personal or family relationship.

(c) Notwithstanding the annual dollar limitation set forth in General 9, Section 26, no member shall directly or indirectly give, or permit to be given, anything of more than nominal value to any Nasdaq employee who has responsibility for a regulatory matter that involves the member. For purposes of this subsection, the term "regulatory matter" includes, but is not limited to, examinations, disciplinary proceedings, membership applications, listing applications, delisting proceedings, and dispute-resolution proceedings that involve the member.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 30. Books and Records

Nasdaq members shall comply with FINRA Rule 4511 as if such rule were part of Nasdaq's rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 31. Use of Information Obtained in Fiduciary Capacity

Nasdaq Members shall comply with FINRA Rule 2060 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 32. Approval of Change in Exempt Status Under SEC Rule 15c3-3

(a) Application — For the purposes of this Rule, the term "member" shall be limited to any member of Nasdaq who is subject to SEC Rule 15c3-3 and is not designated to another self-regulatory organization by the Commission for financial responsibility pursuant to Section 17 of the Act and SEC Rule 17d-1 promulgated thereunder. Further, the term shall not be applicable to any member that is subject to Section 402.2(c) of the rules of the Treasury Department.

(b) A member operating pursuant to any exemptive provision as contained in subparagraph (k) of SEC Rule 15c3-3 under the Act (Rule 15c3-3), shall not change its method of doing business in a manner which will change its exemptive status from that governed by subparagraph (k)(1) or (k)(2)(ii) to that governed by subparagraph (k)(2)(i); or from subparagraph (k)(1), (k)(2)(i) or (k)(2)(ii) to a fully computing firm that is subject to all provisions of Rule 15c3-3; or commence operations that will disqualify it for continued exemption under Rule 15c3-3 without first having obtained the prior written approval of Nasdaq

(c) In making the determination as to whether to approve, deny in whole or in part an application made pursuant to paragraph (b), Nasdaq staff shall consider among other things the type of business in which the member is engaged, the training, experience and qualifications of persons associated with the member, the member's procedures for safeguarding customer funds and securities, the member's overall financial and operational condition and any other information deemed relevant in the particular circumstances and the time these measures would remain in effect.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 33. Reporting Requirements for Clearing Firms

(a) Nasdaq Members shall comply with FINRA Rule 4540 as if such Rule were part of Nasdaq's Rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with General 9, Section 33 by complying with FINRA Rule 4540 as written, including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under General 9, Section 33 are being performed by FINRA on behalf of Nasdaq.

(b) Pursuant to the Rule 9600 Series, Nasdaq may in exceptional and unusual circumstances, taking into consideration all relevant factors, exempt a member or class of members unconditionally or on specified terms and conditions from any or all of the provisions of this Rule that it deems appropriate.

(c) Exemptive Relief.

(1) Upon written request for exemptive relief pursuant to the Rule 9600 Series, Nasdaq generally will grant an exemption from the reporting requirements of General 9, Section 33 to a self-clearing firm that:

(A) derives, on an annualized basis, at least 85 percent of its revenue from transactions in fixed income securities;

(B) conducts an institutional business that settles transactions on an RVP/DVP basis, provided that such exemption from reporting shall apply only with respect to such institutional business unless Nasdaq determines that any other remaining business otherwise qualifies for an exemption under this subparagraph (c) or is de minimis in nature; or

(C) does not execute transactions for customers or otherwise hold customer accounts or act as an introducing broker with respect to customer accounts (e.g., that engages solely in proprietary trading, or that conducts business only with other broker-dealers or any other non-customer counter-parties).

(2) Upon written request for exemptive relief pursuant to General 5, Section 2, Nasdaq also generally will grant an exemption to a clearing firm with respect to one or more of the introducing firms for which it clears if the introducing firm meets one of the above-stated grounds for exemptive relief.

(3) Any self-clearing firm that, due to a change in the facts pertaining to the operation and nature of its business or the operation and nature of the business of a firm for which it clears, as applicable, no longer qualifies for an exemption previously granted by Nasdaq from the reporting requirements of General 9, Section 33 must promptly report such change in circumstances to Nasdaq and FINRA, Department of Member Regulation, and commence compliance with the reporting requirements of General 9, Section 33.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 34. Extensions of Time Under Regulation T and SEC Rule 15c3-3

A member designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with FINRA Rule 4230 as if such Rule were part of Nasdaq's Rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with General 9, Section 34 by complying with FINRA Rule 4230 as written, including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under General 9, Section 34 are being performed by FINRA on behalf of Nasdaq.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 35. Nonregistered Foreign Finders

(a) Member firms, and persons associated with a member, may pay to nonregistered foreign persons transaction-related compensation based upon the business of customers they direct to member firms if the following conditions are met:

(1) the member firm has assured itself that the nonregistered foreign person who will receive the compensation (the "finder") is not required to register in the U.S. as a broker/dealer nor is subject to a disqualification as defined in the Exchange Rules, and has further assured itself that the compensation arrangement does not violate applicable foreign law;

(2) the finders are foreign nationals (not U.S. citizens) or foreign entities domiciled abroad;

(3) the customers are foreign nationals (not U.S. citizens) or foreign entities domiciled abroad transacting business in either foreign or U.S. securities;

(4) customers receive a descriptive document, similar to that required by Rule 206(4)- 3(b) of the Investment Advisers Act of 1940, that discloses what compensation is being paid to finders;

(5) customers provide written acknowledgment to the member firm of the existence of the compensation arrangement and that such acknowledgment is retained and made available for inspection by the Exchange;

(6) records reflecting payments to finders are maintained on the member firm's books and actual agreements between the member firm and persons compensated are available for inspection by the Exchange; and

(7) the confirmation of each transaction indicates that a referral or finders fee is being paid pursuant to an agreement.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 36. Market Quality Program

This Rule is not applicable to a member that is accepted into the Market Quality Program pursuant to Rule 5950 or to a person that is associated with such member for their conduct in connection with that program.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 37. Anti-Money Laundering Compliance Program

Nasdaq Members and persons associated with a member shall comply with FINRA Rule 3310 as if such Rule were part of Nasdaq's rules.

Supplementary Material to General 9, Section 37

.01 Independent Testing Requirements

Nasdaq members and persons associated with a member shall comply with FINRA Rule 3310.01 as if such Rule were part of Nasdaq's Rules. For purposes of this Rule, references to FINRA Rule 3310 shall be construed as references to General 9, Section 37.

.02 Review of Anti-Money Laundering Compliance Person Information

Each Nasdaq member must review and, if necessary, update the information regarding its anti-money laundering compliance person designated pursuant to this Rule in the manner prescribed by General 2, Section 11.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 38. Margin Requirements

(a) A member that is not designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with the initial and maintenance margin requirements of Regulation T and the self-regulatory organization to which the member is designated for oversight pursuant to SEC Rule 17d-1. Members shall comply with Regulation T and such self-regulatory organization rules, and shall submit to such self-regulatory organization any filings required thereunder, in each case as if such rules were part of Nasdaq's rules.

(b) A member designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with the initial and maintenance margin requirements of Regulation T and the FINRA Rule 4210 as if such Rules were part of Nasdaq's Rules.

(c) Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with this Rule by complying with FINRA Rule 4210 as written, including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under this Rule are being performed by FINRA on Nasdaq's behalf.

(d) Pursuant to General 5, Section 2 Nasdaq may exempt any member from the requirements contained in paragraph (e)(3) of FINRA Rule 4210, as applied to Nasdaq members through this Rule, if the account referenced in paragraph (e)(3) of FINRA Rule 4210 is confined exclusively to transactions and positions in exempted securities.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 39. Fidelity Bonds

(a) Each member required to join the Securities Investor Protection Corporation who has employees and who is a member in good standing of another self-regulatory organization shall follow the applicable fidelity bond rule of the self-regulatory organization to which it is designated by the Commission for financial responsibility pursuant to Section 17 of the Act and SEC Rule 17d-1 thereunder.

(b) A member designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with FINRA Rule 4360 as if such Rule were part of Nasdaq's Rules. Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with General 9, Section 39 by complying with FINRA Rule 4360 as written, including, for example, filing requirements and notifications. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under this Rule are being performed by FINRA on behalf of Nasdaq.

(c) For purposes of this Rule:

(1) references to an "Association member" shall be construed as references to a "Nasdaq member", and

(2) references to Article I, paragraph (q) of the By-Laws shall be construed as references to General 1,

(d) Pursuant to General 5, Section 2 any member subject to paragraph (c) of FINRA Rule 4360, through the application of subparagraph (b), may apply to Nasdaq for an exemption from such requirements. The exemption may be granted upon a showing of good cause, including a substantial change in the circumstances or nature of the member's business that results in a lower net capital requirement. Nasdaq may issue an exemption subject to any condition or limitation upon a member's bonding coverage that is deemed necessary to protect the public and serve the purposes of this Rule.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 40. Capital Compliance

(a) A member designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with FINRA Rule 4110 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule, references to Rule 9557 shall be construed as references to General 5, Rule 9557.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 41. Regulatory Notification and Business Curtailment

(a) A member designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with FINRA Rule 4120 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule, references to Rule 9557 shall be construed as references to General 5, Rule 9557.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 42. Audit

(a) A member designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with FINRA Rule 4140 as if such Rule were part of Nasdaq's Rules.

(b) For purposes of this Rule, references to Rule 9557 shall be construed as references to General 5, Rule 9557.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 43. General Requirements

(a) Nasdaq members and persons associated with a member shall comply with FINRA Rule 4511 as if such Rule were part of the Nasdaq rules.

(b) For purposes of this Rule, references to "FINRA rules" shall be construed as references to "Nasdaq rules" and references to "FINRA books and records" shall be construed as references to "Nasdaq books and records"

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 44. Records of Written Customer Complaints

Nasdaq members and persons associated with a member shall comply with FINRA Rule 4513 as if such Rule were part of the Nasdaq rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 45. Customer Account Information

(a) Nasdaq members and persons associated with a member shall comply with FINRA Rule 4512 as if such Rule were part of the Nasdaq rules.

(b) For purposes of this Rule:

(1) references to Rule 3260 shall be construed as references to General 9, Section 19;

(2) references to Rules 2070, 2090, and 4512 shall be construed as references to General 9, Sections 29, 10, and this Rule, respectively;

(3) references to "a prior FINRA rule" shall be construed as references to "a FINRA or Nasdaq rule in effect prior to the effectiveness of FINRA Rule 4512";

(4) Nasdaq and FINRA are parties to the Regulatory Contract pursuant to which FINRA has agreed to perform certain functions on behalf of Nasdaq. Therefore, Nasdaq members are complying with this Rule by complying with FINRA Rule 4512 as written, including, for example, providing information required by FINRA staff. In addition, functions performed by FINRA, FINRA departments, and FINRA staff under this Rule are being performed by FINRA on behalf of Nasdaq.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 46. Authorization Records for Negotiable Instruments Drawn From a Customer's Account

Nasdaq members and persons associated with a member shall comply with FINRA Rule 4514 as if such Rule were part of the Nasdaq rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 47. Approval and Documentation of Changes in Account Name or Designation

(a) Nasdaq members and persons associated with a member shall comply with FINRA Rule 4515 as if such Rule were part of the Nasdaq rules.

(b) For purposes of this Rule, references to Rule 3260 shall be construed as references to General 9, Section 19.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 48. Notifications, Questionnaires and Reports

(a) A member designated to Nasdaq for oversight pursuant to SEC Rule 17d-1 shall comply with FINRA Rule 4521 as if such Rule were part of Nasdaq's Rules.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 49. Payments Involving Publications that Influence the Market Price of a Security

(a) Except as provided in paragraph (b), no member shall, directly or indirectly, give, permit to be given, or offer to give, anything of value to any person for the purpose of influencing or rewarding the action of such person in connection with the publication or circulation in any electronic or other public media, including any investment service or similar publication, Web site, newspaper, magazine or other periodical, radio, or television program of any matter that has, or is intended to have, an effect upon the market price of any security.

(b) The prohibitions in paragraph (a) shall not apply to compensation paid to a person in connection with the publication or circulation of:

(1) a communication that is clearly distinguishable as paid advertising;

(2) a communication that discloses the receipt of compensation and the amount thereof in accordance with Section 17(b) of the Securities Act; or

(3) a research report, as that term is defined in FINRA Rule 2241.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098); amended August 7, 2020 (SR-NASDAQ-2020-045).

Section 50. Foreign Members

A member which does not maintain an office in the United States responsible for preparing and maintaining financial and other reports required to be filed with the Commission and Nasdaq must:

(a) prepare all such reports, and maintain a general ledger chart of account and any description thereof, in English and U.S. dollars;

(b) reimburse Nasdaq for any expenses incurred in connection with examinations of the member to the extent that such expenses exceed the cost of examining a member located within the continental United States in the geographic location most distant from Nasdaq;

(c) ensure the availability of an individual fluent in English and knowledgeable in securities and financial matters to assist representatives of Nasdaq during examinations; and

(d) utilize, either directly or indirectly, the services of a broker/dealer registered with the Commission, a bank or a clearing agency registered with the Commission located in the United States in clearing all transactions involving members of Nasdaq, except where both parties to a transaction agree otherwise.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

Section 51. Research Analysts

Nasdaq member that employs a research analyst or publishes or otherwise distributes a research report shall also be a member of FINRA or the New York Stock Exchange and shall comply with FINRA Rules 1120, 1250 and 2241 (and any other FINRA rules that apply to research analysts or research reports), as amended. For purposes of this Rule, (i) "research analyst" shall mean an associated person who is primarily responsible for, and any associated person who reports directly or indirectly to such research analyst in connection with, the preparation of the substance of a research report, whether or not any such person has the job title of "research analyst," and (ii) "research report" shall mean a written or electronic communication that includes an analysis of equity securities of individual companies or industries, and that provides information reasonably sufficient upon which to base an investment decision.

Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).

 
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