INSTITUTE COMMENT LETTER ON PROPOSALS TO MODIFY SOES/SELECTNET AND TO ESTABLISH AN AGENCY QUOTE AND LIMIT ORDER BOOK

1 See Memorandum to Equity Markets Advisory Committee No. 17-99, dated May 21, 1999. [11029] June 2, 1999 TO: EQUITY MARKETS ADVISORY COMMITTEE No. 19-99 RE: INSTITUTE COMMENT LETTER ON PROPOSALS TO MODIFY SOES/SELECTNET AND TO ESTABLISH AN AGENCY QUOTE AND LIMIT ORDER BOOK ______________________________________________________________________________ As we previously informed you,1 the Securities and Exchange Commission (“SEC”) published for comment proposed rule changes filed by the National Association of Securities Dealers (“NASD”) to modify its Small Order Execution System (“SOES”) and SelectNet system and to permit the separate display of customer orders by market makers through a market maker agency identification symbol (“Agency Quote”). In addition, the SEC reopened the comment period on Nasdaq’s limit order book filing. The Institute has filed a comment letter with the SEC strongly supporting the limit order book proposal and the proposed modifications to the SOES and SelectNet systems and expressing its concern that the Agency Quote proposal would modify the existing Nasdaq market in ways less desirable than a limit order book. A copy of the letter, which is substantially similar to the draft letter previously circulated to the Committee, is attached. If you have any questions, please contact the undersigned by phone at (202) 371-5408 or by e-mail at aburstein@ici.org. Ari Burstein Assistant Counsel Attachment