[ By Howard Haykin ] FINRA reminds firms that FINRA Rule 5131(d)(4) prohibits firms from accepting a market order for the purchase of shares in a new issue in the secondary market prior to the commencement of trading of such shares in the secondary market. Discussion. New issues are inherently more volatile than securities with an established public trading history.  Given the absence of an established trading market, the potential exists for a wide variance between the public offering price of a new issue and the price at which trading on the secondary market commences.  As a result, investors who place  market orders for an IPO may find their orders filled at prices beyond their reasonable expectations, and such transactions may further contribute to the unconstrained increase in the price of a new issue in the secondary market. To protect against this occurrence, paragraph (d)(4) of Rule 5131 prohibits members from accepting a market order for the purchase of shares of a new issue in the secondary market prior to the commencement of trading of such shares in the secondary market.  FINRA believes that requiring investors to place limit orders prior to the commencement of trading serves the dual purposes of protecting investors and facilitating price discovery. This rule, which was announced in FINRA Regulatory Notices 10-60 and 11-29, became effective on 9/26/11. FINRA Contacts. Direct questions to:  Racquel Russell, Asst. General Counsel, Office of General Counsel - (202) 728-8363. For further details, go to:   [FINRA RegNote 12-24, May 2012] and [NASD Rule Filing 03-140].