Amex Interim Automatic Execution System for
NASDAQ UTP Securities

• SEC Approval Order. The SEC approved Amex Auto-Ex functionality on April 24th, 2003 on a temporary basis until the Amex implements its more comprehensive Auto-Ex technology platform. This document explains many details of the Amex interim Auto-Ex functionality.
• List of Tier One and Tier Two Securities. As noted below, Tier One securities are available for automatic execution up to the lesser of 1,000 shares or the displayed size, and Tier Two securities are available for automatic execution up to the lesser of 500 shares or the displayed size. These share amounts are minimums and are subject to revisions upward.

• Auto-Ex Eligibility: An Auto-Ex eligible order in a Nasdaq National Market security will be executed automatically at the Amex Published Quote ("APQ") for such security when the APQ is at the National Best Bid or Offer in that security.

An Auto-Ex eligible order for a Tier 1 Nasdaq National Market security must be a round lot, or partial round lot ("PRL"), market or marketable limit order for 1,000 shares or less received by the Exchange electronically. An Auto-Ex eligible order for a Tier 2 Nasdaq National Market security must be a round lot, or PRL, market or marketable limit order for 500 shares or less received by the Exchange electronically. These share amounts are minimums and are subject to revisions upward.

For purposes of this interim Auto-Ex, a "Tier 1" Nasdaq National Market security is a stock with an average daily consolidated trading volume of over 10 million shares during the preceding calendar quarter, and a "Tier 2" Nasdaq National Market security is a stock with an average daily consolidated trading volume of 10 million shares or less during the preceding calendar quarter. (See attached list of Nasdaq UTP securities included in Tiers 1 and 2).

• Threshold: Auto-Ex will not occur in a stock for 10 seconds after there has been an Auto-Ex trade in that security. Orders received during this 10-second time interval will route to the book. After 10 seconds, Auto-Ex will become available to inbound Auto-Ex eligible orders.
• Eligible Orders: Market, Market OB (Market or better), Limit, Limit OB (Limit or better), AON (All or none), IOC (Immediate or cancel) and FOK (Fill or kill) order types are eligible for Nasdaq Auto-Ex.
• Quote Conditions:

	Crossed/Locked Market: When the APQ is at the NBBO and a Crossed or Locked market condition exists, eligible orders will Auto-Ex against the APQ.
	APQ Size = 100: Eligible orders will Auto-Ex against the APQ when the quote size is 1.
	NBBO Bid/Ask = 0: The Auto-Ex program will not recognize an invalid NBBO Bid or Ask of 0.00. If such a quote is received, eligible orders will Auto-Ex at the APQ.

• Stop & Stop/Limit Elect: If a trade in an eligible Nasdaq order will elect a Stop or Stop Limit order on the book, the order will route to the book.
• AON Validation: An eligible Nasdaq AON order will route to the book when insufficient size exists on the relevant side of the APQ.
• Maximum Spread: Auto-Ex will not occur in a stock if the spread in the APQ in that security is equal to or greater than 30 cents.

Business questions about this document should be directed to the Business Strategy and Equity Order Flow Department at (800) 932-1332.

If you have any questions about this letter and how it will affect your firm, please feel free to call the Amex at 800-932-1332.