Subject: File No. SR-NASDAQ-2013-032
From: Charles Fairchild
Affiliation: Controller and CAO, Cray Inc.

March 29, 2013

March 29, 2013

The NASDAQ Stock Market
One Liberty Plaza
165 Broadway
New York, NY 10006

Re: Release No. 34-69030, File Number SR-NADAQ-2013-032

Dear Sirs and Madams,

We appreciate the opportunity to respond to NASDAQs proposed rule that would require listed companies to have an internal audit function. Although the proposed rule may strengthen internal controls, we believe any increase would not be significant and that the associated costs would far outweigh any benefits.

Listed companies like Cray already have regular audits and internal reviews of internal controls as part of Section 404 of the Sarbanes-Oxley Act. We have a low volume of transactions which allows us to maintain a relatively small accounting team and allows our external auditors to obtain a very high coverage of transactions during their work. For example, our external auditors performed detailed audit procedures on more than half of our 2012 revenue. Given this, we believe any reduction in time spent by our auditors as a result of an internal audit function would not be significant.

As we have a small accounting team, we are concerned that the need to respond to internal audit inquiries may cause us to add additional staff. This additional accounting staff would be incremental to any staff that would come onboard in our new internal audit function. The cost associated with additional accounting staff and the staff required for an internal audit function could be significant.

Existing regulation such as the Sarbanes-Oxley Act and the new standard on Conflict Minerals already places public companies listed in the United States at a competitive disadvantage compared to their peers outside the United States. Adding a requirement for an internal audit function would only increase that disadvantage, in addition to serving as a deterrent for small companies to go public in the United States.

We believe the decision to create an internal audit function is best left to the Audit Committee. We believe the skills and backgrounds of the members of the Audit Committee, in addition to their visibility into the organization, puts them in the best position to determine when the size and complexity of the company warrants an internal audit function.

Before considering an internal audit function mandate, we believe there should be adequate study to determine whether this mandate will yield further improvement in internal controls. This mandate would represent a significant burden to companies listed on NASDAQ and should not be implemented unless there is concrete evidence showing that companies with an internal audit function have superior reporting integrity.

In summary, we applaud the effort to further strengthen internal controls, however, we do not believe a rule to mandate an internal audit function will significantly increase these controls and would be overly burdensome on smaller organizations.


_By__/S/___Dan C. Regis______________________________
Daniel C. Regis
Chairman, Cray Inc. Audit Committee