Subject: File No. SR-NASD-2005-030
From: Michael Pagano

June 23, 2005

1st Global Capital Corp. 1st Global is a fully disclosed retail broker-dealer registered to conduct business in all domestic jurisdictions, with over 1200 Registered Representatives offering securities services through nearly 600 branch and non-branch locations.

As the Chief Compliance Officer of 1st Global, I appreciate the opportunity to submit comments on the issues raised in the above captioned proposed rule change by the National Association of Securities Dealers, Inc.

The NASD made the following statement in responding to its Proposed New Uniform Definition of Branch Office under NASD Rule 3010g2:

While NASD understands that this may increase a firms registration costs, NASD believes that a firms administrative and supervision costs for all locations should not increase as a result of this proposal. The proposed branch office definition does not modify a firms responsibility to supervise or monitor activities at any location where it engages in securities business. NASD Rules require a firm to supervise such activities regardless of whether the location is registered or not. In addition, the development of a centralized branch office registration system through CRD will alleviate current registration burdens, thus making branch office registration and renewal a more efficient process.

1st Global is of the opinion that at best this statement demonstrates a misunderstanding of the business model of a large number of NASD registered broker-dealers or at worst a misrepresentation by the NASD of the effects of the combined rule proposals on certain of their member firms.

The NASD should be required to answer the following questions and provide an estimate of the effect of each on the industry:

1. Will the proposed branch office definition result in substantially more locations being registered as branch offices?

2. Will the proposed creation of Form BR result in the need to capture more information than previously necessary to register a location as a branch office?

To the extent that the first question is answered in the affirmative, the only valid conclusion is that expenses will increase for the firms which have to register the additional locations. For example, if Firm A used to register 100 offices at a cost of 7,500 and after the proposal takes effect has to register 500 offices at a cost of 37,500, that results in an increase in expenses of 30,000. To the extent that the proposal allows a firm to avoid state branch registration costs there would be an offset, however, the number of states that require branch office registration is small. Therefore, the offset is small. The end result is an increase in costs.

To the extent that the second question is answered in the affirmative, the only valid conclusion is that the expense related to capturing and tracking that information will increase. For example, if Firm A had to capture and input 15 data points under the only registration process and after the proposal takes effect has to capture and input 30 date points into the proposed Form BR, the only logical conclusion is that it will cost the firm more to do so. To the extent that the proposal allows a firm to avoid state branch registration forms there would be an offset, however, the number of states that require branch office forms is even small than the number that impose branch registration costs. Again, the end result is an increase in costs.

Together the combination of a vastly expanded pool of locations which falls within the newly proposed definition of branch office and the vastly expanded amount of information that will need to be captured and input into the CRD result in dramatic cost increases for many broker-dealers. At the same time, we see no viable explanation for how this initiative will result in any enhancement to any objective related to customer protection.

1st Global believes that two things are necessary before this initiative becomes one that it can support. First, a more reasonable definition of branch office should be used that would result in less offices being designated as such then under the current proposal. Second, a more reasonable amount of information should be included on the Form BR that would result in less of an administrative burden for broker-dealers.

Again, we thank the Commission for the opportunity to comment on these important issues.

Sincerely,

Michael A. Pagano
Chief Compliance Officer
1st Global
8150 North Central Expressway, Suite 500
Dallas, TX 75206
214 378-0303
214 378-0388 fax