Comment on SR-NYSE-2004-5

Eric D. Roiter Senior Vice President and General Counsel Fidelity Management & Research Company 82 Devonshire Street Boston, MA 02109-3614 December 8, 2004 U.S. Securities and Exchange Commission th450 5 Street, N.W. Washington, DC 20549-0609 Attention: Mr. Jonathan G. Katz, Secretary Re: File No. S7-10-04, Regulation NMS, Release No. 34-49325 (February 26, 2004) (the “NMS Release”) and File No. SR-NYSE-2004-5, Release No. 34-50173 (August 10, 2004) Ladies and Gentlemen: I am writing on behalf of Fidelity Investments to present a preliminary study our market structure and economics research team has done to compare the implicit costs of trading NYSE-listed stocks on the New York Stock Exchange to the implicit costs of trading those same securities in other, voluntarily linked market centers: NASDAQ, ECNs and the Archipelago exchange. The study refers to these other market centers as “the Electronic Market.” The data used for the study are the “dash-5” data filed with the Commission pursuant to Rule 11Ac1-5 under the Securities Exchange Act of 1934 for the NYSE and each of the market centers in the Electronic Market. The study indicates that the “hybrid” market on the NYSE is a substantially more costly trading environment than that of the fully automatic trading environment of the Electronic Market. That differential is important to all investors — both individual and institutional. The NYSE has ...