RYAN BECK & CO., LLC
220 South Orange Avenue
Livingston, New Jersey 07039
(973) 597-6000

April 3, 2002

VIA OVERNIGHT MAIL

Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609

Re: Release No. 34-45526 - National Association of Securities Dealers and New York Stock Exchange Proposals Relating to Research Analyst Conflicts of Interest, Files Nos. SR-NASD-2002-21; SR-NYSE-2002-09

Dear Mr. Katz:

I am the President, Chief Operating Officer and General Counsel of Ryan Beck & Co., LLC ("Ryan Beck"). On behalf of Ryan Beck, I am writing in response to the Securities and Exchange Commission's request for comments to Release No. 34-45526 (the "Release"). The Release sets forth the proposed new NASD Rule 2711 and proposed revisions to NYSE Rule 472 (collectively, the "Proposed Rules") which relate to research analyst conflicts of interest. We wish to comment from the perspective of a relatively small securities firm. We believe the Proposed Rules impose unnecessary hardships on smaller entities.

Ryan Beck is a firm with 130 brokers, 8 research analysts and 15 investment bankers. It offers research, investment banking services, trading and underwriting. Ryan Beck's chief executive officer (the "CEO") is also actively involved with the firm's investment banking clients and in managing the investment banking functions of the firm. In contrast, the firm's research functions report to another member of executive management. By virtue of the CEO's control position in the management structure of Ryan Beck, all of Ryan Beck's employees, including its research analysts, are subject to the CEO's indirect supervision and control, at the same time he is an active investment banker.

Proposed NASD Rule 2711(b)(1) states that "[no] research analyst may be subject to the supervision or control of any employee of the member's investment banking department." Proposed NYSE Rule 472(b)(1) states that "Research Department personnel or any associated person(s) engaged in the preparation of research reports may not be subject to the supervision or control of the Investment Banking Department of the member or member organization."

The Proposed Rules, if implemented as currently proposed, appear to prohibit the CEO from providing investment banking services while serving as the firm's chief executive officer. While a situation where an officer performs both investment banking services and firm wide supervisory functions may not exist at large firms, it is a common model at smaller firms which provide investment banking.

With respect to a section of the Release relating to NASD Rule 2711(b)(2), "[the] NASD [requested] comments on whether [2711(b)(2)] might impose unnecessary burdens on small members that may have the same employee perform investment banking and research services." [page 11534]. Unfortunately, the NASD failed to address the situation in smaller firms where the same employee performs investment banking services and supervisory functions.

We recommend that a specific exemption be provided in NASD 2711(b)(1) and NYSE 472(b)(1) to permit any member of senior management, including the chief executive officer, to serve in his or her position of management and simultaneously act as an investment banker so long as the firm adopts procedures (i) so that research analysts do not report directly to the executive officer/investment banker and (ii) the executive officer/investment banker does not exercise supervision or control that is directed at influencing any specific research report.

We believe that our recommendation would further the purpose of the Proposed Rules while addressing a situation common to small firms in the investment banking business.

Very truly yours,

ROBERT M. BERSON
President and Chief Operating Officer