The Securities and Exchange Commission (SEC) has approved a Nasdaq^® proposal to add Unit Investment Trusts (UITs) to the Mutual Fund Quotation Service^SM (MFQS^SM). Beginning January 16, 2001, Nasdaq will begin to accept listing applications from UITs to use MFQS. MFQS data is disseminated via the Nasdaq Level 1 Service^SM to market data vendors.

Background

According to the Investment Company Institute (ICI), a UIT is defined as:

A registered investment company that buys and holds a relatively fixed portfolio of stocks, bonds and other securities. "Units" in the trust are sold to investors (unitholders) who receive a share of principal and interest or dividends. UITs have a set date for expiration. When the trust is dissolved, the proceeds from the securities are paid to the unitholders.

As of 1999, the ICI estimates that there were a total of 10,418 trusts with a market value of $94.6 billion. Nasdaq estimates that approximately 30-50 trusts per month will be listed on MFQS.

Implementation Plan

Working with the National Unit Trust Association (NUTA) and ICI, Nasdaq developed a phase-in plan to incorporate UITs into the MFQS. Initially, Nasdaq will use the existing Level 1 fund message formats for the UIT data. During the year, Nasdaq will modify its Level 1 and Daily List processing to incorporate additional UIT data in phases. The implementation plan is as follows:

Phase I — January 16, 2001

• Level 1 Processing: As noted above, Nasdaq will use the existing Mutual Fund Regular Release message format (Category F — Type M) to carry UIT data. Initially, UITs will be identified as closed-end funds in the Level 1 data stream.

• Daily List Processing: Nasdaq will add a termination date field to the Mutual Fund Daily List for the UITs. The Daily List is available on the Nasdaq Trader^SM website.

• UIT Symbology: Currently, the MFQS is confined to a five-character, alphabetic symbol. To differentiate UITs from other mutual funds, Nasdaq will initially make all UIT symbols start with the character "Z" and end in the character "X" (e.g., ZABCX). In addition, UITs will not be permitted to use "Z" as the second letter of the symbol.

Phase II — March/April 2001

• Level 1 Processing: No changes are anticipated.

• Daily List Processing: Nasdaq will expand the Mutual Fund Daily List elements to include Code and Distribution Type Code.

• UIT Symbology: Nasdaq will expand the MFQS to support six-character, alphabetic symbol lengths for UITs. At this time, UITs may either retain the five-character symbol with the "Z" or move to a restricted six-character symbol. With the six-character symbol, UIT symbols will be allowed to begin with any character but will still end with the sixth character "X." (Note: Only UITs may utilize a six-character ticker symbol. Open-end mutual funds, closed-end mutual funds, and money market funds will continue to be disseminated with five-character ticker symbols.)

Phase III — To be determined

In the fourth quarter of 2001, Nasdaq plans to introduce a new message format for UITs to its Level 1 data feed and to further modify the UIT symbology to allow up to eight alphanumeric characters. As soon as details are available, Nasdaq will post a Vendor Alert to the Nasdaq Trader website.

Since there are no data format changes associated with Phase I, Nasdaq will not offer any test data for UITs to Level 1 subscribers. As soon as release and testing dates are set for Phase II, Nasdaq will post a Vendor Technical Notice to the Nasdaq Trader website. For the latest information on upcoming test and release dates, please refer to the Release Schedule section of the site.

Thank you for your attention to this matter. For background information on UITs, please visit the Investment Company Institute’s website at www.ici.org Questions about UITs and Level 1 should be directed to Nasdaq Data Products at (202) 728-8480 or MKTDATASVC@nasdaq.com