On April 13, the National Stock Exchange, Inc. (NSX or Exchange) filed with the Securities and Exchange Commission a proposal to adopt NSX Rule 5.7 and accompanying Interpretations and Policies .01 (Annual Compliance and Supervision Certification). The new rule would require each Equity Trading Permit (ETP) Holder’s Chief Executive Officer to certify annually to having in place a process to establish, maintain, review, modify and test policies and procedures reasonably designed to achieve compliance with the applicable rules of the Exchange and federal securities laws and regulations.
Specifically, the proposed rule would require the CEO to certify on an annual basis that the ETP Holder has in place processes to: (i) establish and maintain policies and procedures reasonably designed to achieve compliance with applicable NSX rules and federal securities laws and regulations; (ii) modify such policies and procedures as business, regulatory and legislative changes and events dictate; and (iii) test the effectiveness of such policies and procedures on a periodic basis, the timing of which is reasonably designed to ensure continuing compliance with applicable NSX rules and federal securities laws and regulations, all of which processes are to be evidenced in a report reviewed by the CEO (or equivalent officer), chief compliance officer and such other officers as the ETP Holder may deem necessary to make the certification. The CEO also would certify that the CEO (or equivalent officer) has conducted one or more meetings with the chief compliance officer in the preceding 12 months and consulted with the chief compliance officer, outside consultants, lawyers and accountants, to the extent deemed appropriate, in order to attest to the statements made in the certification.
he proposed rule change also creates a new Interpretation and Policy .01 to Rule 5.7, which sets forth the language of the certification and gives further guidance as to the requirements and limitations of the rule. http://www.sec.gov/rules/sro/nsx/2007/34-55631.pdf