Institute Comments on NASDR Day Trading Rules Proposal

Washington, DC, June 3, 1999 - In response to an NASD Regulation, Inc. request for comment on two proposed day trading rules, the Institute has submitted the attached comment letter. The Institute's letter states that while we have no objections to efforts by NASDR to regulate day trading, we are concerned that NASDR's interpretation of "recommendation" for purposes of these rules may have implications beyond them. In the "Special Notice to Members" proposing these rules, NASDR stated that a member "would be recommending a day trading strategy . . . if it affirmatively promoted day trading through advertising, training seminars, or direct outreach programs and an individual engaged in day trading in response to these solicitations." The Institute's letter points out that this interpretation is far broader than NASDR's current interpretation of the term recommendation.