219 Willow Avenue
Hoboken, New Jersey 07030
Mr. Jonathen G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC, 20549-0609
Dear Mr. Katz,
This letter is in response to the proposed amendment of the Super Soes SR-NASD-2001-66 reserve size display requirement and refresh increment rule. In the past, the Securities and Exchange Commission has put into place rules and regulations that place the small investor first. Unfortunately not all members of Nasdaq allow these rules to be implemented easily. The members I refer to are the Market Makers. Presently I speak for the small investor when I say that the recent approval and implementation of Super Soes has greatly improved the state of the Nasdaq stock market. For approximately three years the Market Makers used their power to prevent Super Soes from ever going into effect. The benefits of the rule are quite clear. Orders are executed in an orderly and timely fashion. When orders are filled quickly and efficiently the market then reacts appropriately. It is the responsibility of the Market Maker to maintain a fair and orderly market. If they have the ability to manipulate the stocks then what will be is a market that is anything but fair and orderly.
As an experienced Market Maker and now a small investor I believe in the truth and integrity of the Nasdaq stock market. The role that the Market Makers play is crucial to the movement of a company's stock. To take advantage of their position and try to prevent the small investor from being treated equally is not very fair. Perhaps they have lost sight of the big picture. It is the small investor that makes up the entire market as a whole. The large institutional orders that are placed make up a large part of the order flow. But one cannot forget about the combination of orders created by the individual investor. The fact that the Market Makers want to revert back to not having to display one thousand shares when they have reserve creates a situation that only benefits them and hurts the small investor. What is created is a slowdown of the momentum of the stock movement. How can the investor possibly benefit from the slowdown? The answer is they cannot benefit. They will only suffer if the Market Maker gives out prints of one hundred shares per one thousand share orders. It is costly and inefficient. The stock cannot rise or fall in reaction to the order flow. It will move in the direction the Market Makers choose. If they are allowed to continue to hide the fact that they have a large order then the whole point of Super Soes will be defeated. What the Market Makers are trying to prevent is a lack of transparency. The Nasdaq stock market was not meant to be a market of elusions and deceit. It is unfortunate that the core of the Nasdaq, the Market Makers makes every to create a market that suits them. The basic idea of rules and regulations are to allow for the individual investor to receive proper execution of their orders. The liquidity that would be taken away by allowing the Market Makers to no longer abide by the refreshing increment rule would not allow for a stock to move properly. Subsequently it is the small investor who will pay the price.
It is unclear to me how quickly the rules that have just been implemented are being questioned so soon. Super Soes has been in effect for three months. How is this enough time to make a decision about its effectiveness? Thank you for your anticipated cooperation in reconsidering the proposed amendment.