Institute Comments on Amended Nasdaq Order Display Facility Proposal

Washington, DC, April 24, 2000 - The Institute has filed a comment letter with the Securities and Exchange Commission regarding an NASD proposed rule change to amend certain aspects of its proposal to establish the Nasdaq Order Display Facility and to modify the Nasdaq trading platform. In response to public comments on the original proposal, Nasdaq is proposing to amend, among other things, the five-second interval delay between price levels and the order execution algorithm as it relates to ECNs, UTP Exchanges, and displayed size refreshed from reserve.

The Institute comment letter supports modifications to Nasdaq's quotation montage and trading platform. However, the letter reiterates Institute concerns regarding the level of transparency in the proposed Order Display Facility as well as the internalization feature of the proposed system. The Institute believes these aspects of the proposal require further examination before approval.

In addition, the letter supports Nasdaq amending its proposal to provide for a more limited interval delay between price levels to address concerns raised by commenters regarding the proposed five-second interval delay. The letter also states, however, that because of the brevity of the proposal's comment period, the Institute is not able, at this point, to comment definitively on whether this change sufficiently addresses concerns. Finally, the Institute questioned the change to size priority from time priority to determine the order in which "reserve" orders are filled, since this could discourage market participants from displaying orders greater than 1,000 shares.