Sent: Monday, June 24, 2002 9:37 PM
Subject: NASD ADF Proposal : SR-NASD-2001-90 

From the Office of James Ryan……
 
June 20, 2002

Mr. Jonathan Katz 
U.S. Securities and Exchange Commission 
450 Fifth Street, N.W. 
Washington, DC 20549
Re:  SR-NASD-2001-90

Dear Mr. Katz,

At the urging of my brokerage firm, I was reading
about the Nasdaq's Alternative Display Facility the
other day, and I was quite surprised to learn about
some of the things that the SEC and the NASD/NASDAQ
are actually considering passing. Some of these things
will hurt the markets - badly.

From what I read, the SEC is telling the NASDAQ that
in order to pass this SuperMontage proposal (which by
the way, seems highly anti-competitive to most small
to mid-sized brokerage firms and ECNs) they need to
provide a viable method to display quotations on
NASDAQ stocks if certain participants choose to not
play on SuperMontage. Not a bad idea. But, the idea
does not go far enough. The NASDAQ will naturally not
put in any significant effort into making this idea
work - because they don't care if it works or not. 

They just want SuperMontage to work. 

It's like (the SEC) telling the General Motors that if
they want to introduce a new SUV to the market that
they must make an alternative vehicle to an SUV so
that those who don't want an SUV can buy the
alternative vehicle instead. GM will make a go-cart
because that technically satisfies the SEC, but does
not really provide a viable alternative.

Today, there is a guaranteed method of getting
executions: Order-handling rules, best-execution
rules, anti-backing-away rules, short-selling rules
that utilize the National quote, etc. The ADF proposal
throws all of that away and says that there are no
rules.

If the SEC is serious about its insistence on a viable
ADF prior to the Supermontage implementation, then the
SEC MUST ensure that a viable ADF is built prior to
the implementation. That has to include all of the
rules in place for execution and NBBO guarantee to my
orders that are there today.

I implore the SEC: DO NOT LET THE ADF GO FORWARD
unless it builds in the execution services and rules
that are in place today.
 
Jim Ryan