Subject: File No. SR-NASD-2006-074
From: Timothy Levin

February 15, 2007

Morgan, Lewis Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103

February 15, 2007

Ladies and Gentlemen:

I am writing on behalf of our client, Context BH Equity Fund, LP (the "Fund"), which is a private investment fund that invests primarily in local and regional banks. Many start-up banks seek to raise capital through an issuer-directed and non-underwritten initial offering that is exempt from registration under the Securities Act of 1933 under Section 3(a)(2), but which may be treated as an initial public offering for purposes of Rule 2790. Because the Fund may be deemed to be a restricted account for purposes of NASD Rule 2790, Rule 2790 has limited the Fund's ability to participate in certain bank initial public offerings. The Fund strongly supports the proposed amendments to Rule 2790, and the adoption of Rule 2790(d)(2), in particular. The Fund believes that the adoption of Rule 2790(d)(2) will have the effect of increasing investment opportunities for investors such as the Fund, as well as increasing access to capital for start-up banks, without raising any of the concerns that Rule 2790 was designed to prevent.

The Fund requests, however, that the Commission clarify two aspects of Rule 2790(d)(2) by providing interpretive guidance at the time of the adoption of the Rule 2790 amendments. The Fund believes that it is not uncommon for banks that propose to make an initial public offering to engage the services of a broker-dealer to provide advice to the bank and its sponsors with regard to a variety of structural, financial and capital formation issues. In effect, we understand that banks often engage broker-dealers to serve in a general advisory capacity, while nonetheless not having any "involvement or influence, directly or indirectly," in the bank's "allocation decisions with respect to any of the new issue securities in the offering" as contemplated under Rule 2790(d)(2)(C). Accordingly, we request that the Securities and Exchange Commission (the "Commission") specifically state in the release adopting the amendments to Rule 2790 that a new issue undertaken by an issuer may qualify for the exception provided by Rule 2790(d)(2), notwithstanding that the issuer has engaged a broker-dealer to provide advisory services, including advice regarding capital structure and capital raising, so long as no broker-dealer has engaged in the conduct specified in Rule 2790(d)(2)(A)-(C). We also request that the Commission state that a purchaser may reasonably rely on a represenation from an issuer to the effect that no broker-dealer has engaged in any of the conduct specified in Rule 2790(d)(2)(A)-(C) with respect to the offering, so long as the purchaser neither knows, nor has reason to know, that the representation is false.

Very truly yours,

Timothy W. Levin