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June 20, 2005

Reg NMS Mystery: Where Is It?

By Gregory Bresiger

"The devil is in the details." This is a common phrase one hears when a complicated piece of legislation passes Congress or when a commission or agency has passed a controversial measure.

As Traders Magazine was going to press, the landmark four part Reg NMS reforms-passed by the Securities and Exchange on a three-to-two vote on April 6-still hadn't been put in the Federal Register.

There was some confusion in the trading community over what the NMS details will be.

"I am convinced that this is taking so long because the staff is making some changes," said a trading executive who would not be quoted by name.

The STA's Trading Issues Committee recently became fearful over what will be on the record for reserve orders and has made inquiries of SEC sources.

"Our understanding is that displayed orders will be protected under NMS. And the rules don't apply to non-displayed orders," said John Giesea, president of the STA. "However, we will be going over the text of the Reg NMS," he added.

And when will that be available? An SEC spokesman said the seeming delay in publishing the order in the Federal Register was "nothing unusual." He said it will happen about a week after the SEC publishes a notice of Reg NMS at its website.