November 16, 2009
November 16, 2009
Ms. Elizabeth M. Murphy
Secretary
United States Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Re: Elimination of Flash Order Exception from Rule 602 of Regulation NMS
Release No. 60684
File No. S7-21-09
To the Commission:
Atherton Lane Advisers, LLC (Atherton Lane) is an SEC registered investment adviser that offers comprehensive wealth management and investment counseling services to private clients. We support the Commissions proposed rule eliminating the flash order exception to Regulation NMS.
Earlier this year we wrote to the Commission to express our concern about server co-location and flash orders, and we requested that the Commission propose rules addressing these practices. We agree with the Commission that the current immediate execution or withdrawal exception to Rule 602 is no longer relevant in light of current markets and trading practices and should be eliminated. We are concerned that flash orders are available only to short term trading professionals and gives them an unfair advantage over long term investors. While proponents of this trading practice may argue that flash orders promote increased market liquidity and price discovery, we believe that benefit, if any, is far outweighed by the damage to public confidence in the fairness of the markets which would result from a continuation of this practice.
Based on the foregoing, we support the Commissions proposed rule eliminating the flash order exception to Regulation NMS. We thank you for the opportunity to comment on the proposal.
Sincerely,
William E. McDonnell, Jr.
Chief Compliance Officer