Subject: File No. SR-NASD-00-03

Date:    02/28/2000 3:40 PM
     
     
File No. SR-NASD-00-03
     
    This e-mail constitutes my comments to the referenced proposed rule change
(File No. SR-NASD-00-03).
     
    Broadway is, in general, in favor of the proposed changes.  There are
certain sections of the proposal, however, that Broadway believes are not in the
best interest of either the investing public nor member firms.
     
    Broadway believes that the proposed section (f)(8)(B)(iv)(b)(1), which
requires that an account be margined based on the cost of all the day trades 
made during the day in the event that a pattern day trader exceeds his day 
trading buying power, fails to address the NASD's stated reasons for proposing 
changes to the margin rules applicable to day trading activities.
     
    At the end of section II(C) of the proposal, wherein it describes the NASD's
position, it indicates, among other things, that the proposed rule change is 
appropriate to address the additional risks inherent in leveraged day trading 
activities and will provide greater financial stability to a day trader's 
account.  We do not believe that the foregoing section of the proposal addresses
these concerns.  Moreover, we believe that this section is punitive in nature 
and unfairly targets day traders.  
     
    The SEC should be working with the premise that a trader should be
responsible for his actions, the investing public should be treated fairly and 
member firms should not be put at any greater risk than they are willing to 
incur.  A trader should not be "punished" for exceeding his buying power, but 
should be held "responsible" for exceeding it.  This means the trader should pay
margin calls within the time frames established in the proposal and should be 
subject to a reduction in buying power until a margin call is satisfied. 
However, the trader should not be subject to a margin call based on the cost of 
all day trades made during the day in lieu of a margin call based on the highest
open position during that day.  The goals should be trader responsibility and 
market and firm stability, not punishment.  I see no justification for imposing 
a formula which will punish investors for exceeding their buying power (by even 
one dollar) when you can simply ensure (without punishing) that investors act 
responsibly.
     
    In addition, Broadway believes that section (f)(8)(B)(iv)(c) of the proposed
rule, which prohibits a trader from withdrawing the money he uses to meet margin
calls for two business days and reduces a trader's access to the money in his 
account, will cause the market to be less liquid and does nothing more than 
"prove" that a trader can endure two additional days of not having those funds 
available to him.  Again, this section appears to be based on the premise of 
punishment rather than a legitimate regulatory purpose.  We believe that the 
minimum equity and maintenance requirements adequately address any concerns that
the NASD is attempting to address by prohibiting the withdrawal of funds.
     
    Kindly consider the foregoing comments when considering the adoption of the
proposed rule change.  Please do not hesitate to contact me with any questions 
or comments.    
     
Respectfully submitted, 
     
Mark H. Peckman, Esq.
Broadway Trading, LLC
50 Broad Street, 2nd Floor
New York, NY  10004