Subject: File No. SR-NASD-2005-094
From: Charles W Austin, Jr.
Affiliation: C. W. AUSTIN, JR. P.C.

September 17, 2005

I write to echo the sentiments of others that, while the NASDs proposal to further circumscribe the universe of those allowed to serve as public arbitrators is commendable in theory, the Proposed Rule does not go far enough.

Under the Proposed Rule, any member or associate of a professional firm which derives less than ten percent of its revenues from work performed on behalf of industry members and their affiliates is deemed acceptable to sit as a public arbitrator in customer-member disputes. It is a simple and, I would suggest, undeniable reality that, as the financial services industry continues to consolidate through merger and acquisition, the competition to procure and retain professional work on behalf of the industry intensifies. In the case of large firms of the type which perform the great majority of the professional work generated by member firms and their affiliates, the ten percent threshold could realistically represent millions of dollars in firm revenue. For example, according to the Am Law 100 for 2004, a copy of which is attached in PDF, gross revenue generated by the top 100 American law firms - a list comprising a virtual Whos Who of firms which perform services for the financial services industry, including the defense of customer claims - ranged from 1.44 billion dollars to 200 million dollars.

To suggest that any member or associate of such a firm could/would risk alienating a client sector which generated even two percent of revenues of this magnitude is a denial of the reality of the professional services marketplace. Quite simply, it is extremely difficult - if not altogether impossible - and unrealistic to expect any person whose financial well-being depends in any way on the generation of revenue from the financial services industry to be a truly independent public arbitrator. Accordingly, the NASD should prohibit any member or associate of any professional firm which performs any work on behalf of any broker-dealer or its affiliates from sitting as a public arbitrator.

Alternatively, should the SEC choose to approve the ten percent threshold set forth in the Proposed Rule, it should require a far more stringent screening process to determine if that threshold is met or exceeded than the process which appears to be currently in place.

Thank you for your usual consideration.

(Attached File #1: cwaustin7432.pdf)