Executive Summary $250, and two or more Market NASD Effective July 1, 1999, the maximum Ma k e r s . Small Order Execution SystemSM (S O E S SM ) order sizes for 336 Nasdaq In accordance with Rule 4710, Nas- Notice to National Market® (NNM) securities daq periodically reviews the maxi- will be revised in accordance with mum SOES order size applicable to National Association of Securities each NNM security to determine if Members Dealers, Inc. (NASD®) Rule 4710(g). the trading characteristics of the issue have changed so as to warrant For more information, please contact an adjustment. Such a review was 99-46 ® Na s d a q Market Operations at conducted using data as of March (203) 378-0284. 31, 1999, pursuant to the aforemen- Maximum SOES Order tioned standards. The maximum Sizes Set To Change SOES order-size changes called for Description by this review are being implemented July 1, 1999 Under Rule 4710, the maximum with three exceptions. SOES order size for an NNM security is 1,000, 500, or 200 shares, • First, issues were not permitted to depending on the trading characteris- move more than one size level. For Suggested Routing tics of the security. The Nasdaq example, if an issue was previously ® Senior Management Workstation II (NWII) indicates the categorized in the 1,000-share maximum SOES order size for each level, it would not be permitted to Ad v e r t i s i n g NNM security. The indicator “NM10,” move to the 200-share level, even if Continuing Education “NM5,” or “NM2” displayed in NWII the formula calculated that such a corresponds to a maximum SOES move was warranted. The issue Corporate Finance order size of 1,000, 500, or 200 could move only one level to the Executive Representatives shares, respectively.1 500-share level as a result of any Government Securities single review. The criteria for establishing maxi- In s t i t u t i o n a l mum SOES order sizes are as fol- • Second, for securities priced below In s u r a n c e lo w s : $1 where the reranking called for a Internal Audit reduction in the level, the maximum (1) a 1,000-share maximum order SOES order size was not reduced. Legal & Compliance size shall apply to NNM securities Mu n i c i p a l on SOES with an average daily • Third, for the top 50 Nasdaq securi- non-block volume of 3,000 shares ties based on market capitalization, Mutual Fund or more a day, a bid price of less the maximum SOES order sizes Op e r a t i o n s than or equal to $100, and three or were not reduced, regardless of Op t i o n s more Market Makers; whether the reranking called for a re d u c t i o n . Registered Representatives (2) a 500-share maximum order size Re g i s t r a t i o n shall apply to NNM securities on In addition, with respect to initial pub- Re s e a r c h SOES with an average daily non- lic offerings (IPOs), the SOES order- block volume of 1,000 shares or size reranking procedures provide Sy n d i c a t e more a day, a bid price of less than that a security must first be traded on Sy s t e m s or equal to $150, and two or more Nasdaq for at least 45 days before it Market Makers; and is eligible to be reclassified . Tr a d i n g Tr a i n i n g (3) a 200-share maximum order size Thus, IPOs listed on Nasdaq within Variable Contracts shall apply to NNM securities with the 45 days prior to March 31, 1999, an average daily non-block volume were not subject to SOES order-size of less than 1,000 shares a day, a reranking procedures. bid price of less than or equal to NASD Notice to Members 99-46 June 1999 303 Following is a listing of the 336 NNM size for an NNM security in an amount equal ing unit when a Market Maker is not display- issues that will have the maximum to the maximum SOES order size for that ing a limit order, and which thus eliminated SOES order size changed on July 1, security. See generally, NASD Rule the requirement that Market Makers quote a 1999. 4613(a)(1) - (2). On July 15, 1998, the Secu- size equal to the maximum SOES order size. rities and Exchange Commission approved Endnote an amendment to NASD Rule 4613(a)(1)(C), © 1999, National Association of Securities Dealers, 1Previously, Nasdaq Market Makers were which reduced the minimum quotation size Inc. (NASD). All rights reserved. required to maintain a minimum quotation for all Nasdaq securities to one normal trad- Ma x i m um SOES Order Size Changes In NNM Securities All Issues In Alphabetical Order By Security Name (E f fe c t i v e July 1, 1999) Old New Old New Symbol Security Name Level Level Symbol Security Name Level Level TC H C 21ST CENTURY HLDG 50 0 10 0 0 BB H F BARBERS HAIRSTYLIN 50 0 10 0 0 BP F H BOSTON PVT FIN 50 0 10 0 0 A EP A Y BOTTOMLINE TECH INC 20 0 50 0 BO Y D BOYD BROS TRANS IN 50 0 10 0 0 AS B P A S B FINANCIAL CP 50 0 20 0 BR A D BRADLEES INC 20 0 50 0 AB A N P ABI CAP TRUST PFD 50 0 10 0 0 BC S T BR O A D C A S T . C O M 10 0 0 50 0 AB O V ABOVENET COMMUNICTNS 20 0 50 0 BR C M BROADCOM CORP CL 50 0 10 0 0 AA A B B ADMIRALTY BCP B 50 0 10 0 0 BV R S BVR SYSTEMS LTD 50 0 10 0 0 DI N E W ADVANTICA WTS 10 0 0 50 0 AM R I ALBANY MOLECULAR RES 20 0 50 0 C AO R G B ALLEN ORGAN CO B 20 0 50 0 AL N C ALLIANCE FINL CP 20 0 50 0 CB B I C B BANCSHARES 50 0 10 0 0 AL L N ALLIN COMMUNICATIO 50 0 20 0 CE R B C E R B C O INC 50 0 20 0 AI F C AMER INDEMNITY FIN 50 0 10 0 0 FL Y A F C H C HELICO CL A 20 0 50 0 AN F I AMERICAN NATL FINL 20 0 50 0 CS P I C S P INC 50 0 10 0 0 AS C A AMERISTAR CASINO 10 0 0 50 0 CF F I C&F FINANCIAL CP 20 0 50 0 AF S C ANCHOR FIN CORP 10 0 0 50 0 CN E B F CALL-NET ENTRPR CL B 50 0 10 0 0 AN D R ANDERSEN GROUP INC 20 0 50 0 CL Z R W CANDELA CP WTS 20 0 50 0 AS I G F ANSALDO SIGNAL NV 10 0 0 50 0 CN T B Y CANTAB PHARM ADR 20 0 50 0 AR C A F ARCADIS NV 50 0 10 0 0 CS W C CAPITAL SOUTHWEST 10 0 0 50 0 AR I S ARI NETWORK 10 0 0 50 0 CB C L CAPITOL BANCORP LT 10 0 0 50 0 AR M H Y ARM HLDGS ADS 10 0 0 50 0 CB C L P CAPITOL TRUST I PF 50 0 10 0 0 AT Y T ATI TECHNOLOGIES 20 0 50 0 CP R K CAPROCK COMM 50 0 10 0 0 AT L P P ATLANTIC PFD CAP CP 20 0 50 0 CR R B CARROLLTON BANCORP 50 0 20 0 AI I I AUTOLOGIC INFO INT 10 0 0 50 0 CE C X CASTLE ENERGY CP 50 0 10 0 0 AX H M AXIOHM TRANS SOL 50 0 20 0 CA T T CATAPULT COMM CP 20 0 50 0 CL P A CELL PATHWAYS INC 50 0 10 0 0 B CC B N CENTRAL COAST BCP 50 0 10 0 0 CF A C CENTRAL FIN ACCEPT 10 0 0 50 0 BE S I B E SEMICON ORD 20 0 50 0 CH N L CHANNELL COML CORP 10 0 0 50 0 BF E N B F ENTERPRISES IN 50 0 20 0 CH E R B CHERRY CP CL B 50 0 20 0 BN B C P B N B CAP TR PFD 20 0 50 0 CN R M F CINRAM INTL INC 20 0 50 0 BT B T B T SHIP SP ADR 50 0 20 0 CI V C CIVIC BANCORP 50 0 10 0 0 BW I N B BALDWIN LYONS CL B 50 0 10 0 0 CL K B CLARK/BARDES HLDGS 50 0 10 0 0 BP A O BALDWIN PIANO ORGA 10 0 0 50 0 CN B B CNB INC 20 0 50 0 BM C C P BANDO MCGLOC PFD A 50 0 20 0 CN Y F CNY FINANCIAL CP 50 0 10 0 0 BN S C BANK OF SANTA CLAR 50 0 20 0 CT B P COAST BANCORP 20 0 50 0 BK F R BANKFIRST CORP 50 0 10 0 0 CO H B COHOES BANCORP 20 0 50 0 NASD Notice to Members 99-46 June 1999 304 Old New Old New Symbol Security Name Level Level Symbol Security Name Level Level CB A N COLONY BANKCORP 20 0 50 0 EX A P EXCHANGE APPLICATNS 20 0 50 0 CB B O COLUMBIA BANCORP 50 0 10 0 0 EX D S EXODUS COMMUN 10 0 0 50 0 CN A F COMMERCIAL NATL FI 20 0 50 0 CF I C COMMUNITY FIN CP 10 0 0 50 0 F CM S V COMMUNITY SVGS 20 0 50 0 CN Q R CONCUR TECHNOLOGIES 20 0 50 0 FC B F F C B FINANCIAL CP 50 0 10 0 0 CN X T CONEXANT SYSTMS 20 0 50 0 FL A G F L A G FINANCIAL 50 0 10 0 0 CN R D CONRAD INDS INC 50 0 10 0 0 FR P P F R P PROPERTIES I 20 0 50 0 CW C O CONS WATER CO INC 50 0 10 0 0 FT M T F FANTOM TECHS INC 50 0 10 0 0 CM E T S CONTL MORTGAGE EQUIT 50 0 10 0 0 FA T B FATBRAIN.COM INC 20 0 50 0 CO M M F CORECOMM LTD 50 0 10 0 0 FF L C FFLC BNCP INC 10 0 0 50 0 CO C O CORINTHIAN COLLEGES 20 0 50 0 FS B I FIDELITY BANCORP I 50 0 20 0 CS C Q W CORRECTIONAL SVCS 50 0 20 0 FF F L P FIDELITY CAP TR I 10 0 0 50 0 CR T Q CORTECH INC 20 0 50 0 FA C T FIRST ALBANY COS 50 0 10 0 0 CO V D COVAD COMMUN GROUP 20 0 50 0 FB N C FIRST BANCP TROY 20 0 50 0 CY O E COYOTE NETWORK SYS 50 0 10 0 0 FB S I FIRST BANCSHARES 20 0 50 0 CM S T CREATIVE MASTER INTL 20 0 50 0 FS T C FIRST CITIZENS COR 50 0 10 0 0 CR N S CRONOS GROUP THE 10 0 0 50 0 FF E S FIRST FED S L E 10 0 0 50 0 CN G R CROWN GROUP INC 50 0 10 0 0 FM S B FIRST MUTUAL SVGS 50 0 10 0 0 CT C I CT COMMUNICATIONS 20 0 50 0 FP F C FIRST PLACE FINL 20 0 50 0 CU R T CURTIS INTL LTD 50 0 10 0 0 FR G B FIRST REGIONAL BNC 20 0 50 0 FS L B FIRST STERLING BKS 50 0 10 0 0 D FU N C FIRST UNITED CORP 50 0 10 0 0 FE L E FRANKLIN ELEC INC 10 0 0 50 0 DR A I DATA RESEARCH ASSO 50 0 10 0 0 FT B K FRONTIER FIN CORP 50 0 10 0 0 HY T D L DECS TRUST IV 20 0 50 0 FF H H FSF FINANCIAL CP 50 0 10 0 0 DS G X DESCARTES SYS GRP 20 0 50 0 FT N B FULTON BANCORP INC 10 0 0 50 0 DC B K DESERT COMMUNITY B 20 0 50 0 DC P I DICK CLARK PROD IN 20 0 50 0 G DT E K DISPLAY TECHS 50 0 10 0 0 DO C D DOCDATA NV 10 0 0 50 0 GB N K GASTON FED BANCP 10 0 0 50 0 DH O M DOMINION HOMES INC 10 0 0 50 0 GF L S P GCB CAP TRUST PFD 50 0 20 0 DC L K DOUBLECLICK INC 10 0 0 50 0 GS L I GEN SCANNING INC 20 0 50 0 DR R A P DURA AUTO CAP TR 10 0 0 50 0 GE N B B GENESEE CP B 10 0 0 50 0 DX P E DXP ENTERPRISE 20 0 50 0 GZ M O GENZYME MOLEC 50 0 10 0 0 GC T Y GE O C I T I E S 10 0 0 50 0 E GS C I GEOSCIENCE CP 50 0 10 0 0 GA B C GERMAN AMER BANCOR 50 0 10 0 0 ET E K E-TEK DYNAMICS INC 20 0 50 0 GS P T GLOBAL SPORTS INC 50 0 10 0 0 EL X S E L X S I CP 10 0 0 50 0 GB I X GLOBIX CORP 50 0 10 0 0 EG L B EAGLE BANCGROUP IN 10 0 0 50 0 GN E T GO2NET INC 10 0 0 50 0 EW B X EARTH WEB INC 50 0 10 0 0 GU C O GRAND