April 7, 2000

Jonathan G. Katz
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549

Re: Securities Exchange Act Release No. 42208, File No. S7-28-99

Dear Mr. Katz:

Thank you for the opportunity to comment on the structure of the market information fees. This is a critical issue for the securities industry particularly in light of the greatly expanding use of real-time data and the market structure changes that will occur in coming years.

Jordan & Jordan is a management consulting, software development and search firm focused on the financial services industry. Our clients are broker dealers, exchanges and vendors of market information. We understand the value and use of market information.

Jordan & Jordan is also the staff managing office for the Financial Information Forum (FIF) - an industry organization whose participants include broker/dealers, exchanges, market data vendors, service bureaus and others. This response is not from the FIF. The FIF held a meeting on this concept release on February 1. The purpose of the meeting was to help FIF participants better understand this issue. The FIF Chairman, Leo McBlain, encouraged the participants to comment on your release. FIF itself has decided not to respond as an organization.

We do not concur with the approach described in the SEC Concept Release. We feel that the flexible cost-based process described in the document will not address the primary problems of the current structure. Further, we believe that the proposed approach will add to the administrative burden and add unnecessary costs to the industry's market data dissemination infrastructure. We should be cautious that we do not create an FCC-like structure whose usefulness has been replaced by a competitive model.

To implement the proposed flexible cost-based plan hundreds of accountants and economists will have to define and argue about what is included in the costs. The setting of base cost numbers is less than an exact science and will result in additional staff and posturing. The report talks about administrative nightmare. I believe that, if the proposed process is implemented, significant new costs will be added to the administrative burden.

Some of the reasons why we oppose this cost-based approach are as follows:

Some other thoughts

The systems for disseminating real-time market data for the U. S. markets are presently the best in the world. But we must adjust to the realities of new market participants while reducing the administrative burden on all parties. We believe that a renewed sense of commitment to that goal is needed. We must pursue the national market system goals while adapting to new market structures and new technology tools and global competition.


Thomas J. Jordan