Expansion of the Small Order Execution System (SOES)

TO: NASD Members and NASDAQ Level 2 and Level 3 Subscribers

The Association's Small Order Execution System (SOES) began operation on December 14, 1984, with 25 NASDAQ National Market System (NASDAQ/NMS) securities. That number was expanded to 50 stocks by year-end. Recently the Board of Directors of NASD Market Services, Inc. approved a schedule whereby all NASDAQ/NMS issues will be phased into SOES by March 29, 1985. SOES additions are to take place alphabetically in accordance with the first letter in each issuer's corporate name. A copy of that schedule is attached to this notice.

In October 1984, NASD members and NASDAQ Level 2/3 subscribers received material pertaining to the operation of SOES. Included were SOES rules, registration forms and contracts. In response to that mailing, over 200 members have registered as either SOES market makers or order entry firms or in both capacities. With the expansion of SOES to include all NASDAQ/NMS securities, we would again like to invite all NASDAQ subscribers who have not as yet executed SOES agreements to do so. Contracts, registration forms and other information on SOES may be obtained by contacting Mr. John H. Hodges, Jr., Senior Vice President, Market Services in New York at (212) 839-6326.

Sincerely,

John T. Wall
Executive Vice President
Member and Market Services

Attachment

SOES SECURITY AUTHORIZATION SCHEDULE

NASDAQ/NMS securities will be added to SOES according to the first letter of the corporate name in accordance with the following schedule.