FOR IMMEDIATE RELEASE                             98-120


           SEC Staff Recommends That NASDR Operate
    an Electronic Investment Adviser Registration System

     Washington, D.C., October 30, 1998 -- Today, SEC
Executive Director James McConnell notified R. Clark Hooper,
Executive Vice President, Disclosure and Investor
Protection, NASD Regulation, Inc. (NASDR), of the SEC
staff's decision to recommend that the Commission designate
NASDR to operate an electronic investment adviser
registration system.  Mr. McConnell expects that the adviser
registration system will be part of NASDR's Central
Registration Depository system, which is currently being
revised to operate as a web-based system.

     Mr. McConnell stated that the staff's decision was made
jointly with a committee of the North American Securities
Administrators Association (NASAA), on behalf of state
securities administrators.  He expects that the states will
participate in the system.

     An electronic registration system was authorized by
Congress in 1996 to permit investment advisers to satisfy
state and SEC filing requirements by making a single
electronic filing.  A database containing information from
the filings about advisers would be available to investors
through the Internet.  The system would reduce paperwork for
advisers and provide important information for investors
selecting an adviser or financial planner.

     A Commission spokesperson explained that SEC
designation of NASDR only would authorize NASDR to
administer a registration system and database, and would not
authorize it to act as a self-regulatory organization (SRO)
for investment advisers.  He  noted that the creation of an
SRO would require an act of Congress.

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