Subject: File No. SR-NASD-2005-032
From: barry s augenbraun
Affiliation: Senior VP, Raymond James Financial

August 2, 2005

August 2, 2005

Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20459

Re: File Number SR-NASD-2005-032
Proposed Rule Changes to NASD Code of Arbitration
Relating to Written Explanations in Arbitration Awards

Dear Mr. Katz:

On behalf of Raymond James Financial, Inc. RJF or the Company, I am pleased to submit the following comments with respect to File Number SR-NASD-2005-032 relating to written explanations in arbitration awards.
RJF is a diversified financial services holding company whose subsidiaries engage in securities brokerage, investment banking, asset management and other financial services throughout the United States and internationally. The Companys two domestic broker-dealer subsidiaries have approximately 4,400 financial advisors in more than 2,100 locations world-wide.
Raymond James opposes the proposed amendment because it would seriously impair the effectiveness of the arbitration system, to the detriment of brokerage customers and the investing public. Our reasons for opposing this proposal are consistent with those of many participants in the present arbitration system, as well as scholars and commentators who have observed its effectiveness.
1. The NASD proposal would seriously impair the present system, which provides speedy and conclusive resolution of customer disputes.
Arbitration is designed to provide prompt and expeditious resolution of customer claims. For that reason, it is purposely designed to avoid many of the technical details of the litigation process: extensive discovery, depositions, written opinions and appeals.
This system has served both brokerage customers and the industry well. From the point of view of the customer, statistics maintained by the National Association of Securities Dealers, Inc. demonstrate that each year customers win more than 50 of the cases that are brought to adjudication: see Results of Customer Claimant Arbitration Cases, 2000-2004 on the NASD Dispute Resolution web-site.
Requiring written opinions would seriously impair this process. It would impose delays, exaggerate the attention to overly- technical concerns, and lead to an increased number of appeals of decisions.
Nobody would benefit from these delays and impediments to the functioning of the system.
2. Requiring written explanations would compromise the effectiveness of the discretion of arbitrators in fashioning awards.
The arbitration system is not designed to produce results that are based on technical legalities. It is a truism that many arbitration awards represent an exercise of discretion by the panel to afford a client some relief, even when no legal basis exists for an award. While brokerage firms complain about such awards, we also recognize the usefulness of a process that allows arbitrators to provide some measure of relief to customers who feel themselves to be seriously aggrieved.
This exercise of discretion would be compromised, if not eliminated, under the proposal. Where no legal basis exists for an award, it will be impossible for a panel to make one. Such a result does not benefit either the aggrieved customer, or the system itself.
3. The NASD proposal is inherently unfair and one-sided. Under the proposal, only the claimant can require a written explanation for the award. To allow a procedural advantage to one side to a dispute that is not available to the other is on its face unfair and unreasonable. There is no justification for allowing the NASD to place the heavy hand of partisanship on the scales of justice.

Respectfully submitted,

Barry S. Augenbraun
Senior Vice President and Corporate Secretary