Comments of J.K. Tarleton on SR-NASD-2001-90

John K. Tarleton
1659 E Orangecrest Ave
Palm Harbor, FL 34683

June 20, 2002

Jonathan G. Katz
U.S. Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549-0609

Re: File No. SR-NASD-2001-90

Dear Mr. Katz,

I welcome the opportunity to comment on the proposed rule changes of the National Association of Securities Dealers, Inc. in reference to the Alternative Display Facility (ADF).

It is my position that the ADF does not provide any link to the actual market whatsoever and that with all of the technical expertise available a much more investor friendly system could and should be developed. It appears that the ADF has not developed into an appropriate alternative to the NASDAQ Market but will function more like the old pink sheets and is therefore a step backwards. I also believe that the lack of the development of an alternative to the market forces firms and individual investors to use the NASDAQ Market where the best execution may not be available, thereby adversely affecting the small investor.

While the ADF provides an opportunity to display quotes it does nothing to ensure that the customer of a firm who is not a member of NASDAQ gets the best execution available on his trade and vice versa. No procedures have been developed to ensure that an investor in a firm who uses NASDAQ will get the best execution that may be available on the ADF. Why hasn't the NASD addressed the issue of timing between the two markets? Quotes on either market may be the best available but may not be readily available to those who can only use one market. Why hasn't the Commission, or the NASD for that matter, considered a composite quote system? Wouldn't that ensure that the best available price for the small investor.

Why is the NASD still a significant shareholder in the NASDAQ Market? I realize that they will hold preferred shares, however they still stand to profit handsomely from the success of the NASDAQ Market. It has also been pointed out that the NASDAQ Market will share common directors and that they will remain in the same building as the NASD.

The NASD is supposed to be a Self Regulatory Organization who looks out for the best interest of the individual investor, yet this is a case where the conflicts of interest have left the individual investor out in the cold. Has the profit motive of the NASD surpassed its obligation to the investors?

I would conclude by asking the Commission to consider delaying the implementation of the ADF until a viable, competitive alternative to the NASDAQ is developed. The ADF should have a composite quote system to ensure best executions to all investors and should perhaps be run by a neutral third party to ensure that the NASD can fulfill its mission as a Self Regulatory Organization. My proposals would ensure a fair and equitable market where good faith and best efforts would be returned to the marketplace.



John K. Tarleton