From: John Martello [jnmartello@yahoo.com] Sent: Monday, March 22, 2004 2:33 PM To: rule-comments@sec.gov Subject: (s7-10-04) Via Airborne Express and e-mail March 18, 2004 Jonathan G. Katz Secretary Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20459-0609 Re: Request to Testify at Regulation NMS hearings, File No. S7-10-04 Dear Mr. Katz; I would like to request the opportunity to testify at the upcoming hearings relating to Regulation NMS, Commission File No. S7-10-04, at either the Washington, DC hearings on April 1, or the New York, NY hearings on April 21. I am a Managing Director and senior trader and developer at Tower Research Capital LLC, a firm which specializes in highly quantitative, high-volume trading strategies. Previously I was a Vice President at UBS and a consultant for the New York fixed income proprietary trading desk at CSFB, where I also designed sophisticated trading strategies. I would like to testify primarily as to two of the Regulation NMS proposals: the proposal to eliminate subpenny quoting and the proposal to expand the trade- through rule beyond the NYSE. Briefly, I would like to demonstrate that the Commission’s market data that was used to support the proposal to eliminate subpenny quoting is out of date and that current market data demonstrates that subpenny quoting and trading in fact reduces costs for most investors. On the trade-through rule, I would like to testify that extending the rule to other market centers is likely to slow down highly efficient markets such as ECNs, and will also expand the opportunities for sophisticated traders to exploit the optionality created by a trade-through rule at the expense of less-sophisticated traders. I will file a more detailed summary of my testimony by March 26th. If you have any questions, please call me at 212.219.6022 or you can contact me via e-mail at john.martello@tower-research.com. Sincerely, John Martello Managing Director Tower Research Capital LLC __________________________________ Do you Yahoo!? Yahoo! Finance Tax Center - File online. File on time. http://taxes.yahoo.com/filing.html