Sent: Tuesday, June 25, 2002 7:48 PM 
Subject: ADF Proposal SR NASD 2001 90 
 
June 10, 2002 
 
Hon. Jonathan G. Katz  
Secretary - U.S. Securities and Exchange Commission  
450 Fifth Street, N.W.  
Washington, DC 20549 
 
Addressing: SR-NASD-2001-90 
 
Dear Mr. Katz, 
 
In reading the Nasdaq's ADF proposals, it seems that there is no 
way to get an execution. If that is right, that would force all 
participants who wish to participate in the ADF to connect to 
each other separately, or at least to a central hub in order to 
execute among themselves (what execution rules govern that?).  
 
Anyway, the cost of these connections in a decentralized 
marketplace is exorbitant. My math shows that if 100 firms 
participate in the ADF, then each firm must have ALL of the 
connections to ensure that if one of the participants to whom 
they are not connected has the NBBO, then they can get their 
execution. That could happen in one of two ways: 
 
100 connections = 1 connection to each firm Plus 1 to 
SuperMontage (if SM has the best quote) Plus the connection to 
the ADF ($7,000 per month) 
 
High-speed dedicated line cost would be approximately $1,850 per 
month per connection or $185,000 per month + (SM) $10,000 per 
month  
 
TOTAL $202,000 per month or $4,848,000 for two years  
 
FOR ALL FIRMS: $484,800,000 (100 firms) 
 
A few connections. One to SuperMontage and maybe 10 other 
connections to Service Bureaus 
 
10 high speed connections to service bureaus1 at $5,000 per month 
+ 1 to Supermontage @ $10,000 per month  
 
Start-up costs 10 lines X $50,000 = $500,000  
 
TOTAL TWO YEAR OUTLAY:$1,940,000  
 
FOR ALL FIRMS: $194,000,000 (100 firms) 
 
Other concerns: 
 
Not all firms are set up as tech companies that can reliably 
maintain that many connections and ensure data and market 
integrity (that cost is not factored in here)  
 
If there are any firms that are not connected by the Service 
Bureaus, then those firms would also need to connect to each 
other firm (that cost is not factored in here). 
 
The SEC should take into account all business concerns, like the 
cost concerns outlined above, as well as the regulatory risks, 
and practical considerations BEFORE the passage of this 
controversial proposal. 
 
 
Truly yours,  
 
Ira Rosenbloom 
 
 
1 Service bureaus have a minimum non-cancelable term (2 to 3 
years) on their contracts as well as a start up cost ($25,000 to 
$100,000, including programming) [Average $50,000]. Additionally, 
because Service Bureaus have already built their systems they 
command a higher per month charge ($2,500 to $10,000 monthly)--
the average line cost is estimated at $5,000 per month.