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Thursday, October 14, 2010

Equity Trader Alert #2010 - 63
NASDAQ OMX to Launch New Short Sale Monitor with Free Trial through 2010

Markets Impacted:

Contact Information:

What you need to know:

  • NASDAQ OMX® will launch the NASDAQ OMX Short Sale Monitor in beta on Monday, November 8, 2010, pending Securities and Exchange Commission (SEC) approval.
  • The Short Sale Monitor is a tool that provides exception reports and real-time alerts for monitoring your firm's trades of securities on the Short Sale Circuit Breaker list.
  • The Short Sale Monitor will be FREE through 2010.

What is the NASDAQ OMX Short Sale Monitor?

Pending SEC approval, NASDAQ OMX will launch the NASDAQ OMX Short Sale Monitor in beta on Monday, November 8, 2010. The new tool will give firms exception reports for their trades reported to the FINRA/NASDAQ Trade Reporting FacilityTM (TRFTM) in securities on the Short Sale Circuit Breaker list for the following trade circumstances:

  • Sold short, not marked exempt
  • Sold short, marked exempt
  • Sold short on an uptick
  • Marked exempt, but not on the circuit breaker list

Users can set up email profiles to receive alerts via email for any of the above criteria.

In addition, firms will have 30 days of historical alerts and Short Sale Circuit Breaker lists.

Why is NASDAQ OMX introducing the Short Sale Monitor?

The SEC adopted amendments to Regulation SHO with a compliance date of November 10, 2010. Among the rule changes, the SEC introduced Rule 201 (Alternative Uptick Rule), a short sale-related circuit breaker that when triggered, will impose a restriction on prices at which securities may be sold short. The SEC also issued guidance for broker-dealers wishing to mark certain qualifying orders “short exempt.” For more details, refer to Amendments to Regulation SHO (Release 34-61595).

The Short Sale Monitor will give firms real-time alerts of their trades of securities that are affected by the Alternative Uptick Rule. In addition, firms will receive real-time updates as stocks are added to or removed from the Short Sale Circuit Breaker list.

When will system data be available?

System data will be available beginning November 10, 2010. Firms will have the ability to receive alerts for their trades of securities reported to the TRF as well as historical alerts. In addition, firms will have access to real-time and historical changes to the Short Sale Circuit Breaker list.

What enhancements are planned?

NASDAQ OMX plans to add real-time and historical alerts for your firm's trades in the securities subject to the Short Sale Circuit Breakers on The NASDAQ Stock Market® (NASDAQ®), NASDAQ OMX BXSM (BXSM) and NASDAQ OMX PSXSM (PSXSM).

We also plan to add charting and analytics based on firm data and trends.

How long is the free trial?

Pending filing with the SEC, NASDAQ OMX plans to make the Short Sale Monitor free through the end of 2010.

Further information on pricing for 2011 will be communicated as soon as it is available.

Where can I find additional information?

FINRA and TRF (Trade Reporting Facility) are trademarks of Financial Industry Regulatory Authority, Inc.; FINRA/NASDAQ TRF™ is used under license from Financial Industry Regulatory Authority, Inc.

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Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital markets. As the creator of the world's first electronic stock market, its technology powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to approximately 3,900 total listings with a market value of approximately $13 trillion. To learn more, visit: business.nasdaq.com.

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