August 20, 2004 By E-Mail: rule-comments@sec.gov Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549-0609 Attention: Mr. Jonathan G. Katz, Secretary Re: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Treatment of Commodity Pool Trail Commissions; Release No. 34-50065; File No. SR-NASD-2004-108 (the “Release”) Ladies and Gentlemen: Managed Funds Association (“MFA”) welcomes the opportunity to comment on the Release concerning the NASD’s proposal to rescind its long-standing policy with respect to compensation paid to CFTC-regulated brokers who place interests in a publicly offered commodity pool and provide ongoing services to investors in the pool (“trail commissions”). We hope our comments prove helpful to the Commission. Under the NASD’s policy, trail commissions have not been deemed to be sales compensation, subject to the limitations in NASD Rule 2810, for over 20 years. MFA believes that the NASD’s policy should be codified rather than rescinded, to permit the continued efficient operation of commodity pools, including provision of important services to commodity pool investors. The reasons for MFA’s belief were set forth in its letter dated March 12, 2004 on Notice to Members 04-07 (the “MFA Letter”), a copy of which is attached As we discuss below, moreover, MFA believes that (i) the NASD’s proposal to rescind its policy constitutes a ...