Subject: File No. S7-16-97 NASD and Use Of Decimal Pricing Doug Ross 4460 Lake Forest Dr., Suite 228 Cincinnati, OH 45242 513/733-3680 Direct voice June 3, 1997 mailto:pubcom@nasd.com cc:rule-comments@sec.gov Dear Sirs: Pursuant to your request for comment regarding the use of decimal pricing in the Nasdaq stock market, I wanted to voice the opinion of an individual investor. I have copied the SEC pursuant to its request for comments regarding technology, markets and regulation as decimal pricing would seem to relate directly to these topics. It is my opinion and the opinion of many individual investors with whom I have spoken that: o The fractional spreads have promoted a system in which the individual investor appears to be last in the pecking order. Recent academic studies and the NASD's settlement with the SEC have seemingly confirmed what many have believed for quite some time - that the system is stacked against individuals and that many activities among market-makers seem suspect. Often times, it is impossible to execute orders between the bid and the ask, even if the fractional difference is relatively high (e.g., bid = 9, ask is 9 1/2, attempt to execute order at 9 1/4 results in no such execution, regardless of volume). o Fractional spreads often seem artificially high. Many investors with whom I have spoken (and I confess I am in the same boat) can not understand how a ten dollar stock can have a 3/4 spread between bid and ask with relatively high volume. And yet we see similarly (percentage-wise) high spreads in stocks ranging from a few pennies on up. o The transparency of the market must be ensured for Nasdaq to continue to flourish. The buyer and the seller must meet on some common ground. Traditionally, this common ground was the turf of Nasdaq or other stock markets. However, in today's wired world, buyers and sellers will come together using networked means. Any market that does not embrace a more transparent system risks becoming technically obsolete as other means of putting buyer and seller together arise. If Nasdaq is to continue to flourish as a vibrant and healthy market, it is my opinion that it must embrace progress. And decimal pricing is most certainly progress. Thank you for allowing me to voice an opinion. Best Regards, Doug Ross dir@worldnet.att.net