May 5, 2006         

Nancy M. Morris

Secretary

U.S. Securities and Exchange Commission

100 F Street, NW

Washington, D.C.  20549

Re:          File No. SR-NASDAQ-2006-001

File No. SR-NASD-2006-048

Dear Ms. Morris:

Knight Capital Group, Inc. (Knight)^[1] welcomes the opportunity to offer our comments to the Securities and Exchange Commission (Commission) on the above referenced rule filings submitted by the National Association of Securities Dealers, Inc (NASD) and its subsidiary, The Nasdaq Stock Market, Inc. (Nasdaq).  We have commented previously, through our Direct Edge ECN subsidiary, on these issues in a joint letter written to the Division of Market Regulation (a copy is attached below).

Knight respectfully opposes both proposals and requests that the Commission reject both rule filings.  Additionally, we support the recent submission of Bloomberg Tradebook LLC (dated May 5, 2006) and incorporate herein the arguments advanced in their letter.

As we have noted previously, the market impact of the Nasdaq proposals is severe as they hinder competition by targeting unfairly one group of its competitors – the last of the remaining independent Electronic Communication Networks (ECN).  The independent ECNs play a critical role in the marketplace and contribute a significant percentage of the daily liquidity provided to investor trades.  As noted in our prior submission and the Bloomberg letter, these proposals effectively strip these remaining ECNs of any economic and operational viability within the Nasdaq system.  As such, it is clear by these filings that ECNs are being forced from the Nasdaq system.  To put the issue squarely in perspective, one need only ask a few simple questions.  Are investors and the marketplace better off without the liquidity and services provided by the remaining five independent ECNs?  Should competition be permitted to be simply snuffed-out through rule filings which obliterate legitimate business models?

Fair competition and investor choice should continue to dictate and shape the national market system.  These principles have formed the bedrock of the U.S. capital market system and have made it envy of the entire world.

Conclusion

We reiterate that proper measures must be taken to insure a level playing field for all market participants and investors.  Accordingly, we respectfully submit those aspects of the subject rule filings which unfairly impede competition (i.e., at Nasdaq’s proposed order delivery fee and the proposal to eliminate order-delivery functionality) should be rejected completely.

Thank you again for providing us with the opportunity to comment on these rule proposals.  Knight would welcome the opportunity to discuss our comments with the Commission.

Sincerely yours,

Leonard J. Amoruso

cc:           Chairman Christopher Cox

                Commissioner Paul S. Atkins

                Commissioner Roel C. Campos

                Commissioner Cynthia A. Glassman

                Commissioner Annette L. Nazareth

                Robert L. D. Colby, Deputy Director, Division of Market Regulation

Robert R. Glauber, NASD, Chairman and CEO

Robert Greifeld, Nasdaq, President and CEO