Advisories

SEC Approves New NASD Rule To Replace Hot Issue Interpretation

November 2003

The Securities and Exchange Commission recently approved new NASD Inc. Rule 2790 entitled "Restrictions on the Purchase and Sale of Initial Equity Public Offerings" (the "New Rule"). The New Rule governs the purchase and sale of newly issued securities and, when effective, will replace NASD IM 2110-1, the Free-Riding and Withholding Interpretation (the "Interpretation"). Although the New Rule preserves certain provisions of the Interpretation, it also differs from the Interpretation in several significant respects.