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To: TFF who wrote (10013)	4/18/2002 12:59:28 PM
From: Dan Duchardt	Respond to of 12617

Posted on IB Forum interactivebrokers.com On March 8, 2002, Interactive Brokers (“IB”) entered into a settlement to resolve an inquiry by NASD Regulation, Inc. (“NASDR”) regarding the electronic format of orders sent by IB to electronic communication networks (“ECNs”) via the SelectNet system; the electronic format of Order Audit Trail (“OATS”) reports and the retention thereof; and IB’s related supervisory practices. Specifically, NASDR found that IB violated an NASD rule concerning the use of the Nasdaq SelectNet system by electronically sending orders with an “N” (or “non-negotiable”) modifier in accessing ECNs (in cases where IB did not route orders directly to the ECNs). NASDR also found that IB provided 24-character hexadecimal order identification numbers in its OATS reports rather than an 8-character alphanumeric identifier as required by the OATS rules; found that IB failed to retain for a sufficient period of time certain electronic information created by IB as a software debugging record; and found deficiencies in IB’s supervision of these aspects of the firm’s operations. IB cooperated with NASDR staff during the investigation and is pleased that it was able to resolve the NASDR inquiry on satisfactory terms. Under the terms of the settlement, IB did not admit or deny NASDR findings that the firm failed to comply with NASD regulations, but agreed, among other things, to make certain changes in its systems based on NASDR findings. IB is committed to providing to its customers the highest quality electronic trading systems available to market participants anywhere. We are continuously working to update and improve our systems to maintain our preeminence in high-speed execution and straight-through clearing services. Thanks, David Battan, Vice President and General Counsel, Interactive Brokers