Revisions to NASD By-Laws Extending Existing Pilot Program for the Regulatory Fee and the Trading Activity Fee

NASD has filed with the SEC a proposed rule change to extend the pilot program for the Trading Activity Fee (“TAF”) until April 1, 2003. The TAF pilot program (as originally proposed in SR-NASD-2002-98) is currently in effect and is set to expire on March 1, 2003. In a separate filing, NASD is requesting the SEC approve SR-NASD-2002-148, granting permanent approval of the TAF, prior to the expiration of the TAF pilot program on April 1, 2003. If permanent approval is not granted, the trading fee component of the member regulatory pricing structure will revert back to Section 8 of Schedule A to the NASD By-Laws as amended.