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October 12, 2000

Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 02549-0609

Re: File No. SR-NASD-00-34

Dear Sir or Madam:

On September 14, 2000, the Securities and Exchange Commission requested comments on a Proposed Rule Change by the National Association of Securities Dealers, Inc. Relating to the Authority of the Director of Arbitration to Remove Arbitrators for Cause. 65 Fed. Reg. 185. National Futures Association (NFA) welcomes this opportunity to comment on the proposed rule change.

NFA is a congressionally authorized self-regulatory organization developed to maintain the integrity of the futures industry and to protect the public through effective and efficient self-regulation. One service NFA offers is a nationwide arbitration system, which was created for the specific purpose of providing the futures industry's public customers with an informal, fair and inexpensive means of resolving their claims against NFA Members and their employees.

NFA fully supports the NASD's efforts to provide authority for its Director of Arbitration to remove arbitrators for cause after hearings have begun. We believe it is important for a forum to have this ability in order to ensure the integrity of its arbitration proceedings. To that end, staff has the exclusive authority under NFA's arbitration rules to remove an arbitrator from a case, and this authority does not end when a hearing has begun. Furthermore, we have had this authority since the program's inception in 1983, and NFA has never had an award vacated based on its decision to retain or remove an arbitrator.

An arbitrator always has the right - and the responsibility - to remove himself or herself from a case if there is evident partiality. However, when that does not happen, NFA's experience indicates that it is most efficient for NFA, as the forum, to make that decision. By doing so, NFA takes the tough decision out the hands of the other two arbitrators, who may have developed a close working relationship with the arbitrator who is being challenged. Furthermore, this procedure ensures that all issues relating to the arbitration are resolved in the proceeding itself, without requiring the parties to seek judicial intervention.

In closing, NFA strongly supports the NASD's rule proposal. We believe that it protects the integrity of the arbitration process and ensures the impartiality of the arbitrators.

Respectfully submitted,

Cynthia A. Cain
Director, Arbitration
National Futures Association

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