From: Margaret & Marvin Kennebeck []
Sent: February 27, 2004
Subject: File No. S7-10-04

We don’t understand how you can say that you are “affirming the fundamental principle of price priority” in your proposed Regulation NMS. Price priority would imply that each order is exposed to the best opportunity to receive the best price. Simply because one market center chooses to delay access to their prices, they are still valid quotes and should be included in price discovery.

We are opposed to this rule change in its current proposed form. Allowing a five cent exemption will not only be bad for all investors, it may create a whole new arbitrage industry where firms with access to both types of venues will become parasites of unsuspecting individual investors.

Our suggestion would be to force all market centers to build out their infrastructure to be able to execute (and change/cancel) orders within a standardized time frame that is comparable to most of today’s automated exchanges. Make them stand by their quoted prices and sizes.

The only part we agree with is to allow an accredited institutional investor opt out of any trade through protection. If they are well informed professionals, they can have their reasons for wanting executions outside of the national best bid/offer.

Your rule proposal will be detrimental to the heart of the securities industry: The fiduciary responsibility to obtain the best price available for the investor.

Please reconsider this rule change and come up with a better idea to protect the public.

Margaret & Marvin Kennebeck