Subject: File No. S7-02-10
From: Jeff Frerichs

April 1, 2010

Dear SEC,
After graduate business school, I worked for a bank on Wall Street for a few years, ran a small hedge fund for a few years, and currently work with a prop trading firm. In my 20 years of trading there has never been a bigger reason for concern about the stability of the equity market than there is right now.

The heart of any market is the liquidity provider. These traders are willing to make markets in any condition provided there is a reasonable risk/reward profile. With the initiation of dark pools and the ability of broker-dealers to sub-penny/front run the liquidity providers, the financial death of the liquidity provider is close at hand. Invisible orders in the dark pools and on some exchanges, as well as preferential treatment for some that are allowed to sub-penny, has led to the mass exodus of the liquidity providers.

If this trend continues, the volatity for a given market condition will expand exponentially. The more unstable the market, the greater the cost for investors, hedgers, and corporations that raise money through equity offerings.

Recommendation: Eliminate all sub-pennying to put all market participants on a level playing field. Let dark pools do what they were originally intended to do - cross orders greater than 50,000 shares and immediately show that print on the tape. Eliminate all invisible orders. I though the goal of an efficient fair market was transparency???
Thank you for your consideration.
Jeff Frerichs