Subject: File No. SR-NASD-2005-079
From: Richard M Layne, Esq.

July 21, 2006

Securities and Exchange Commission
Washington D. C.

Re: SR-NASD-2005-079

Dear Sir:

I am very concerned about the proposed cost shifting provision contained in 10322(e) that requires "The party requesting the documents shall be responsible for the reasonable costs associated with the production of the copies." and I am writing to oppose the inclusion of that provision in the rule.

When a brokerage firm subpoenas records from another firm or from accountants or banks, the public investor has no real choice other than to seek copies in order to adequately prepare for the arbitration hearing. In this way the party who subpoenas records can substantially increase the cost to the other party.

This seemingly neutral provision is a significant departure from the customary rule that each party pays the costs associated with the documents that it produces to the other side. This provision will materially harm the public investor in arbitration because it will increase costs to the investor in an amount controlled largely by the brokerage firm. What will be included in "reasonable costs associated with the production of copies"? This could include attorney fees, paralegal fees and administrative fees in an amount determined by the brokerage firm. The costs would certainly include a charge per page at a rate the brokerage firm decides is reasonable. The alternative is to file a motion asking the panel to decide what is reasonable, also expensive.

The disparity in economic resources between the brokerage houses and the public investors means that the hardship of paying for copies of documents subpoenaed by the other party is proportionately greater for the public investors than for the brokerage firms.

This provision will be cited by brokerage firms to support the proposition that public investors should pay for all discovery produced as a condition of having it produced.

Arbitration panels already have the ability to assess and aportion costs at the end of the case. This provision removes the discretion of the arbitrators to assess costs after considering all of the relevant matters in the case.

In summary, the provision will increase the cost to the public investors, and interfere with the arbitration panel's ability to assess costs at the end of the case. This provision should be removed from the rule.

Respectfully Submitted,

Richard M. Layne
Layne Lewis LLP
Portland, Oregon