Notes and references

Executive Summary

On February 27, 2001, the Securities

and Exchange Commission

(SEC) approved amendments to

National Association of Securities

Dealers, Inc. (NASD®) Rule 2520

relating to margin requirements for

day traders (the “amendments”).1

The amendments become effective

on September 28, 2001 and

are substantially similar to amendments

by the New York Stock

Exchange (NYSE) to its margin

rules.2

The text of the amendments and

Federal Register version of the

SEC Approval Order are attached

(see Attachments A & B). For

a detailed description of the

amendments, as well as specific

examples of certain margin

calculations under the amendments,

members should review

the attached SEC Approval Order

(see Attachment B).

Questions concerning this

Notice may be directed to Susan

DeMando, Director, Financial

Operations, Member Regulation,

NASD Regulation, Inc. (NASD

Regulation), at (202) 728-8411, or

Stephanie M. Dumont, Associate

General Counsel, Office of General

Counsel, NASD Regulation, at

(202) 728-8176.