6.19.2009 The New York Stock Exchange (NYSE) released NYSE Regulation Information Memo 09-29, to “remind NYSE and NYSE Amex members and member organizations of their responsibilities when handling orders at or near the close” and reiterate certain points made in Information Memos 09-26 and 09-27. The NYSE counseled that certain orders and order entry practices can improperly dislocate the market in a security, particularly orders entered at or near the close of business. The NYSE warned that orders entered at or near the close of business can artificially distort prices because there is not sufficient time for the market to react to such orders and provide offsetting liquidity that could dampen the resultant volatility. Accordingly, the NYSE advised its members and member organizations that they should avoid holding back large interest for entry at or near the close, since otherwise they could face regulatory exposure for affecting the close inappropriately.
Click http://apps.nyse.com/commdata/PubInfoMemos.nsf/AllPublishedInfoMemosNyseCom/85256FCB005E19E8852575DA004B8452/$FILE/Microsoft%20Word%20-%20Document%20in%2009-29.pdf to access the NYSE’s information memo.