Subject: File No. SR-NASD-2005-094
From: Susan N Perkins, Esq.

September 20, 2005

Re: Proposed NASD and NYSE rule changes to the definition of public arbitrator: Proposed NASD Rule 10308 and NYSE Proposed Rule 607 SEC File Number SR-NYSE-2005-43.

Under both proposed Rules, a public arbitrator could be an individual whose firm derives up to 10 of its gross revenues from the securities industry.

In all SRO arbitrations there is already one industry arbitrator appointed under the rules. The public perception of public customer SRO arbitration against securities industry member firms is thus of a stacked deck. In some arbitrations, this perception is correct: the industry arbitrator is an individual who has personally engaged in some of the same misconduct as that complained of or whose firm has engaged in the same misconduct.

Under the proposed NASD and NYSE Rules, the other two arbitrators could easily be lawyers or accountants whose firms derive substantial revenues from brokerage firms. Under the proposed SRO rules, arbitrators whose firms derive many millions of dollars from brokerage firms could be classified as public arbitrators. Unfortunately, that situation currently exists under the SRO Rules.

The appearance of bias or conflict of interest in the SRO rules should be scrupulously avoided. The proposed NASD and NYSE rule revisions do not go nearly far enough to eliminate the appearance of or potential for bias and self-interest.

As long as the current system exists of appointing an industry arbitrator to every arbitration panel while at the same time allowing other arbitrators with ties to the securities industry to serve as public arbitrators, the SEC and the SROs will continue to have to defend the system of industry arbitration to Congress, the public, and critics whose cynicism is entirely warranted

Very Truly Yours,

Susan N. Perkins
13899 Biscayne Boulevard
Suite 144
North Miami Beach, FL 33181