Karen Hutton Chief Compliance Officer 4020 Lake Washington Blvd Suite 210 Kirkland, WA 98033
Re: Regulation NMS (Rule612)
To Whom It May Concern:
As you may be aware, on January 31, 2006 the U.S. securities industry will be implementing the sub-penny pricing component of Regulation NMS (Rule 612). Rule 612 prohibits market participants from displaying, ranking, or accepting quotations, orders, or indications of interest, in any NMS Stock with a minimum price increment of less than one penny ($.01), if the bid, offer, order or indication of interest is priced at one dollar ($1.00) or above. If the price of the bid, offer, order or indication of interest is priced at one dollar ($1.00), the limit price may not be enumerated in more than four decimal places ($.0001). MNS Stocks generally include Exchange listed and NASDAQ listed cash equity securities. NMS Stocks do not include: (i) cash equity securities that trade on the OTC Bulletin Board or Pink Sheets; or (ii) equity options. Full documentation of the rule as well as the latest FAQ is available on the SEC website and can be found at: http://www.sec.gov/divisio! ns/marketreg/subpenny612faq.htm.
Sub-Penny orders:
In response to Rule 612, beginning January 30, 2006 Citigroup will:
Reject any order in an NMS Stock that has a limit price equal to or greater than $1.00 per share, if the limit price is enumerated to more than two (2) decimal places ($0.01); and Reject any order in an NMS Stock that has a limit price of less than $1.00 per share, if the limit price is enumerated to more than four(4) decimal places ($0.0001).
GTC/GTD Order Handling
Citigroup is requesting that all clients with limit orders in NMS Stocks which are priced over $1.00 and have a limit price enumeration of less than one penny ($0.01), and in more than four (4) decimal places for limit orders priced under $1.00, to cancel and re-enter those orders in compliance with Rule 612 by January 27, 2006. Citigroup will cancel any orders that are not canceled and re-entered as previously specified at the close of business on January 27, 2006.
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