Subject: File No. SR-BX-2010-059
From: K. Richard B. Niehoff

January 31, 2011

Comments attached

The attached was sent on paper in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE, Washington, DC 20549-1090, with the indication on the outside of the envelope marked SR-BX-2010-059 in order for it to be received on or before January 24, 2011. The attached is not posted. Please accept the attached.

United States OTC Markets, Inc.
Suite 450
622 Pelhamdale Avenue
Pelham Manor, New York 10803

Ms. Elizabeth M. Murphy, Secretary
Securities and Exchange Commission
Station Place, 100 F Street, NE
Washington, DC 20549-1090

January 20, 2011

Reference: File Number SR-BX-2010-059

Dear Ms. Murphy,

I am pleased to offer the following response to the above referenced Self Regulatory Organization (SRO) Rule filing. The initiative that is being promulgated by the Boston Stock Exchange, (BX or Exchange) a facility of the NASDAQ OMX Stock Exchange for the purpose of establishing a new small cap, micro cap or similar security type description listing marketplace initially solicited from the base of OTC Equity issuers of registered securities and new initial public offerings of registered securities under the sponsorship of a registered National securities-stock Exchange (National securities Exchange) should be approved by the Securities and Exchange Commission (the Commission). Likewise other registered National securities Exchanges that file similar rules filings and operating procedural plans should be considered for approval. A facility of an SRO functioning in the first instance as a listing marketplace and in the second instance engaging a SRO to provide structural organization of and self-regulation over said marketplace is a meritorious undertaking and should be viewed as a first step towards enhancing the capital markets structure of the United States. A desirable outcome of this first step would engender competitive responses from other SROs proposing variations of the intended BX business plan.

The Commission by extending the comment period on the above referenced Rule filing has put forth a list of questions for comment to be addressed by commentators on the merits of BXs statements in support of the above referenced Filing.

This commentator will focus on several questions specifically the question appertaining to quotations and transaction reports in the broader context of market data fragmentation and the ability of investors to receive best execution and those questions that impinge on market structure.

First, as a market structure issue, this commentator agrees with and offers support of the comments of the Massachusetts Securities Division (MSD) that every precaution is taken by The NASDAQ Stock Market LLC (Nasdaq) to make it known that the issuer

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securities listed on the BX Venture (BX V) marketplace are not to be confused with issuer securities listed on Nasdaq.

Further, the Commission must use its authority to make certain that the structural distinction between the two marketplaces is clear in order to eliminate any public confusion between a National securities Exchange marketplace, Nasdaq in this case, and an organized business subsidiary of an Exchange. BX V must represent that it is not a National securities Exchange enumerated in Section 18(b) of the Securities Act of 1933.

As a market structure paradigm, the Commission must require that the BX V marketplace be very clear in its sales, advertising and marketing material, branding collateral material and literature to describe that BX V is a listing facility operated under the purview and imprimatur of a SRO, the BX, and that BX V listed equity issuer securities do not meet the listing criteria for a registered National securities Exchange.

In order to further promote the development of the National markets of the United States the Commission should not hesitate to give recognition of and approval for a new lower tier or Third Tier listing marketplace for issuers of registered securities that is organized, branded and implemented under a SRO. Further it should be recognized that a listed marketplace can co-exist side by side with or in addition to an OTC marketplace for equity securities that are both listed on a Commission approved marketplace and similarly quoted and transacted in an over-the-counter FINRA quoting and reporting facilities environment. Essentially, this is the business plan that this commentator proposed to the Boston Stock Exchange management and was proposed to and discussed with OTC market participants, Commission staff, FINRA staff and other SROs.

As to the matter of the dissemination of BX V quotation and transaction reports, BX the SRO Exchange sponsor of BX V and not the NASDAQ Stock Market, LLC will be the disseminator of marketplace data for the BX Venture marketplace. BX must clarify and describe how those market data products that will be engaged to ensure broad dissemination of quotation and last sale information will be made available to issuers, investors and brokerages. The possibility for fragmentation of pricing information is a very valid concern and an issue that the Commission is seeking comments regarding. This commentator would suggest that the Commission put forth a requirement for consolidation of marketplace quotation and last sale data. Given the fact that FINRA will also be a collector and disseminator of OTC Equity issuer quotation and trading data sourced from brokerages pursuant to a series of FINRA Rules immediately argues for a consolidation facility that will include and combine BX Venture data with the FINRA OTC data for each identical security being dually quoted and dually transacted. Consolidation and dissemination of quotation data into a best bid and best offer scheme emanating from a central multi-SRO owned, operated and governed processor available

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to all traditional data vendor sources that are currently seamlessly integrated into the infrastructure will forestall fragmentation of market data quotation and last sale information and promote best execution which is a priority concern of this commentator and the Commission alike. This model exists in the CTA and CQOC Plans.

With regard to issuer oversight, this commentator acknowledges that BX, the SMARTS Group and the NASDAQ Stock Market LLC, together and independently, has the wherewithal to provide the surveillance, vetting, listing and marketplace control functions that are proposed in the Filing and or can be provided pursuant to additional Commission imposed listing requirements in order to operate the BX Venture listing marketplace. Nasdaq essentially performed these like functions when acting as the business sponsor and operator of the OTC BB.

Will the BX Venture marketplace help companies raise capital and promote job creation within the United States? There is no historic validation of a non-National securities Exchange equities listing marketplace as a free standing business model extant in the United States to provide an answer. However similar second or third tier marketplace undertakings are an integral component in foreign exchange markets and as such have yielded positive acceptance and economic results often inuring to the benefit of United States issuers that have sought foreign marketplaces for their listing. What is clear to this commentator is that organized markets for issuer securities that are grounded in the principals of transparency and oversighted by SROs replete with rules that promote fair and just principals of trade instill issuer and investor confidence and over time become recognized as essential cogs in the capital market structure of a mature capital market economy.

And now a question to the Commission, why have the United States securities industry practitioners failed to produce any leadership in the development of a lower tier or what this commentator deems to be a third tier public marketplace for issuers of securities? U.S. regulatory sources with certainty can produce rules and regulations and Congress and States can enact laws governing issuers of securities, but industry source practitioners cannot produce organized markets that the rules, regulations and laws were designed for.

With all due respects given this last comment, I request that the Commission act in the affirmative for the approval of SR-BX-2010-059.

Respectfully submitted,

K. Richard B. Niehoff
Chairman and CEO
United States OTC Markets, Inc.