More Curbs on Trading Ahead
Traders Magazine, November 2004
A rule change proposed by the NASD to extend the Manning Rule is still pending with the Securities and Exchange Commission. The nominal parent of Nasdaq is asking that the rule, which generally bars a firm from trading ahead, be extended to customer market orders. "As such," according to the filing, "NASD is proposing that a member be prohibited from trading for its proprietary account on the same side of the market as a customer market order, if that customer market order has not been executed fully and promptly." The rule would cover trading in any Nasdaq or exchange listed security. The proposed rule stipulates what is required if a member has multiple orders on both sides of the market that have not been promptly executed: "The member must have a written methodology in place describing the way in which the member will cross or otherwise execute such orders that is reasonable..."
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