Letter Regarding Datek Comments upon the Second Draft Report of the SEC Advisory Committee on Market Information (“Committee”).

HOLDINGS CORP.
EDWARD NICOLL
CHAIRMAN, CEO

August 27, 2001

Mr. Joel Seligman
Dean and Ethan A. H. Shipley University Professor
Washington University School of Law
1 Brookings Drive
Campus Box 1120
St. Louis, MO 63130

Re: Datek Comments upon the Second Draft Report of the SEC Advisory Committee on Market Information ("Committee").

Dear Dean Seligman & Members of the Committee:

Datek appreciates the opportunity to submit additional comments upon the Second Draft of the Committee's Report. While we recognize that our advocacy for the repeal of the Vendor Display Rule was ultimately a minority view we believe that the Report's casting of Datek as part of a "majority" that favors a new competing consolidator model (the "New Model") misconstrues our position.

As evidenced by new footnotes 238 and 239, there is nothing in the New Model that satisfies our criteria for true market data reform. These criteria are (i) making more information available to the public at lower cost, and (ii) a market driven system delivering innovative products at competitive prices. The SROs appear satisfied that the current fee collection regime will continue if the New Model is adopted (note 238). And due to the Vendor Display Rule, we infer, vendors appear to have little appetite to enter a regulated business in competition with the established SROs (note 239).

Datek's support for a competing consolidator model was solely in the context that the Vendor Display Rule was also repealed. Without such repeal we see our criteria for reform unsatisfied. My support at the May 14^th meeting for a competing consolidator model was explicitly coupled with the repeal of the Vendor Display Rule, as were the votes of several other Committee Members.

Accordingly, I request that the Draft Report not reflect, as it now does in footnotes 225 and 249 and the accompanying text, that Datek supports a competing consolidator model with retention of the Display Rule as the Draft Report now does. The repeated pairing in the Draft Report (e.g., in the Executive Summary) of the twin Recommendations of retaining the Display Rule and embracing a Competing Consolidator Model will unfortunately result in a misapprehension of our view and harm the course of future debate about market data reform-a debate that we welcome and look forward to participating in.

Finally, we wish to thank Dean Seligman for his efforts in this difficult endeavor under the time and meeting constraints that were applicable to the Committee's discussions.

Truly yours,

Edward Nicoll

cc: Members of the SEC Advisory Committee on Market Information

http://www.sec.gov/divisions/marketreg/marketinfo/aa.htm