CONFORMED
                                
 
                               FORM 10-Q
                    SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C. 20549


           [X] Quarterly Report Pursuant to Section 13 or 15(d)
                  of the Securities Exchange Act of 1934


                 For Quarter Ended August 31, 1996

                                 OR
           [ ] Transition Report Pursuant to Section 13 or 15(d)

                  of the Securities Exchange Act of 1934

            For the transition period from               to
 
                                          --------------    -------------


                 Commission file number       1-9480
        ---------------------------------------------------------------------



                            The Sherwood Group, Inc.
       ----------------------------------------------------------------------
                 (Exact name of Registrant  as specified in its charter)



                  Delaware                           22-2394480
               -----------------------------------------------------------
                (State or other jurisdiction of   I.R.S. Employer
                 incorporation or organization)   Identification No.)


              10 Exchange Place Centre, Jersey City, New Jersey     07302
     -----------------------------------------------------------------------
               (Address of principal executive offices)          (Zip code)

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year, if changed
                                since last report)


  Indicate by check mark whether the Registrant (1) has filed all reports 
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
  of 1934 during the preceding 12 months (or for such shorter period that the
  Registrant was required to file such reports), and (2) has  been subject to 
  such filing requirements for the past 90 days.


                                   Yes  X      No

                                       ----      ----


          Indicate the number of shares outstanding of each of the issuer's
            classes of common stock, as of the latest practicable date.

        13,015,685 shares of Common Stock, par value $.01 per share, were 
                        outstanding on September 30, 1996.




<PAGE>
                        THE SHERWOOD GROUP, INC.

                           AND SUBSIDIARIES



                                INDEX


                                                                    PAGE

                                                                 --------

Part I - Financial Information

Item 1. - Financial Statements

Consolidated Statements of Financial Condition
       (Unaudited) - August  31, 1996 and May 31, 1996                3

Consolidated Statements of Income (Unaudited) -
        Three Months Ended August 31, 1996 and 1995                   4

Consolidated Statements of Cash Flows (Unaudited) -
        Three Months Ended August 31, 1996 and 1995                   5

Notes to Consolidated Financial Statements
        (Unaudited) - August 31, 1996                                 6


Item 2. - Management's Discussion and Analysis of
          Financial  Condition  and Results  of  Operations         7 - 9


Part II - Other Information

Item 6. - Exhibits and Reports on Form 8-K                           10

Signatures                                                           11
                                
                                
                                
<PAGE>                               
<TABLE>
<CAPTION>
                                
                 PART I - FINANCIAL INFORMATION
                  ITEM 1 - FINANCIAL STATEMENTS
                                
            THE SHERWOOD GROUP, INC. AND SUBSIDIARIES
                                
         CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                
                                         August 31
                                           1996               May 31,
  ASSETS                                (Unaudited)            1996
<S>                                      <C>                  <C>

Cash                                     $    779,640         $    470,313
Receivables:
  Brokers and dealers                      40,793,939           78,628,199
      Other                                   544,066              519,631
Securities owned, at fair value            54,328,522           32,181,980
Investment securities not readily 
  marketable, at fair value                   501,320              401,320
Investment in partnerships                    249,446              261,286
Notes receivable                              642,852              697,258
Furniture, fixtures and equipment, 
  and leasehold improvements - at cost, 
  net of accumulated depreciation and 
  amortization of $8,927,592 at August 
  31, 1996 and $8,132,165 at May 31, 1996  13,162,716           12,955,614
Computer software, net of accumulated 
  amortization of $558,606 at August 31, 
  1996 and $493,936 at May 31, 1996           758,113              766,256
Identified intangible assets, net of 
  accumulated amortization of $1,356,123 
  at August 31, 1996 and $1,245,176 at 
  May 31, 1996                              2,832,157            2,943,104
Exchange memberships (market value 
  $2,950,000 at August 31, 1996 and 
  $2,827,500 at May 31, 1996)               2,616,496            1,166,496
US Treasury Obligations, held as 
  collateral                                7,891,988            7,782,514
Subordinated notes receivable               3,250,000            3,250,000
Other assets                                2,296,869            1,260,822
                                         $130,648,124         $143,284,793
                 
  LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
 Securities sold, not yet purchased, 
   at fair value                        $  13,327,179        $  18,827,302
 Accounts payable and accrued expenses, 
   including compensation payable to 
   officers and employees of $7,001,720 
   at August 31, 1996 and $15,583,055 at
   May 31, 1996                            16,368,670           24,242,102
 Secured demand notes payable               3,250,000            3,250,000
 Income taxes payable                       3,565,538            5,338,326
 Minority interest in Equitrade             4,700,108            5,057,508
      Total liabilities                    41,211,495           56,715,238
                                
Commitments and Contingencies (Note 4)
                                
Stockholders' equity (Note 5)
 Preferred stock - $.01 par value;
   authorized 1,000,000 shares, 
   none issued                                  -                    -
 Class A common stock - $.01 par value;
   authorized 50,000,000 shares; none issued    -                    -
 Common stock - $.01 par value; authorized
   50,000,000 shares; issued 14,343,201 
   shares                                     143,432              143,432
 Additional paid-in capital                56,958,790           56,958,790
 Retained earnings                         40,939,181           37,936,140
                                           98,041,403           95,038,362
 Less: Treasury stock - at cost, 
   1,326,040 shares at August 31, 1996 
   and 1,313,469 shares at May 31, 1996    (8,604,774)          (8,468,807)
      Total stockholders' equity           89,436,629           86,569,555
                                         $130,648,124         $143,284,793
                                
</TABLE>
                                
The accompanying notes are an integral part of these statements.
                                
                               (3)
<PAGE>
<TABLE>
<CAPTION>  
                      THE SHERWOOD GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF INCOME
                                    (Unaudited)
                             
                                           Three Months Ended August 31,
                                                 1996             1995
<S>                                          <C>              <C>
                                
Revenues:
 Firm securities transactions - net          $ 29,683,515     $ 29,290,163
 Commission income                              7,696,151        6,235,428
 Floor brokerage income                         2,938,304        2,493,677
 Equity loss in partnerships                      (11,840)          (3,548)
 Interest income                                1,995,559        1,323,055
 Fee income                                       426,588          230,987
 Other revenues                                   261,471          178,503
                                               42,989,748       39,748,265
                                
Expenses:
 Compensation and benefits                     15,024,338       12,043,775
 Clearing and related charges                  14,110,873       13,961,096
 Communications                                 2,810,189        2,312,373
 Depreciation and amortization                    971,044          508,676
 Occupancy costs and equipment rental             692,448          669,418
 Other expenses                                 3,274,652        2,240,504
 Interest expense                                  71,741           37,083
                                               36,955,285       31,772,925
                                
 Income before minority interest and
   income taxes                                 6,034,463        7,975,340
                                
 Income of Equitrade allocated to
   minority partners                              (13,600)        (801,546)
                                
 Income before income taxes                     6,020,863        7,173,794
                                
 Income taxes:
   Currently payable:
     Federal                                    2,097,250        1,796,113
     State and local                              920,572          909,817
                                                3,017,822        2,705,930
                                
 Net income                                   $ 3,003,041      $ 4,467,864
                                
                                
 Income per common and common
   equivalent share (a)<F1>:
     Net income                                 $    0.23         $   0.33
                                
                                
 Weighted average common shares
   outstanding                                 13,050,182       13,354,368
                                
<FN>
<F1>(a) For presentation purposes, primary and fully diluted are identical.
</FN>                                
</TABLE>
                                
                                
                                
                                
The accompanying notes are an integral part of these statements.
                                
                                
                               (4)
                                
<PAGE>
<TABLE>
<CAPTION>
                  THE SHERWOOD GROUP, INC. AND SUBSIDIARIES                   
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                                   
                                               Three Months Ended August 31, 
                                                   1996             1995
<S>                                             <C>             <C>
Cash flows from operating activities:
 Net income                                     $ 3,003,041     $ 4,467,864
                                
 Non-cash items included in net income:
  Equity (income) loss in partnerships               11,840           3,548
   Depreciation and amortization                    971,044         508,676
   Income of Equitrade allocated to 
     minority partners                               13,600         801,546
                                
 (Increase) decrease in operating assets:
   Receivables:
    Brokers and dealers                          37,834,260       6,527,034
    Other                                           (24,435)        (44,324)
  Securities owned, at fair value               (22,146,542)     (7,040,435)
  US Treasury Obligations, held as collateral      (109,474)       (114,472)
  Other assets                                   (1,036,047)     (1,010,471)
                                
 Increase (decrease) in operating liabilities:
  Securities sold, not yet purchased, at 
    fair value                                   (5,500,123)     (2,459,793)
  Accounts payable and accrued expenses          (7,873,432)       (751,248)
  Income taxes payable                           (1,772,788)      1,272,359
 Net cash provided by operating activities        3,370,944       2,160,284
                                
Cash flows from investing activities:
 Purchase of investment securities not 
   readily marketable                              (100,000)          -
 Principal collected on notes receivable             54,406          45,625
 Purchases of furniture, fixtures and
   equipment, and leasehold improvements         (1,002,529)     (1,935,719)
 Purchases of computer software                     (56,527)          -
 Purchase of exchange membership                 (1,450,000)          -
 Net cash used in investing activities           (2,554,650)     (1,890,094)
                                
Cash flows from financing activities:
 Purchase of treasury stock                        (135,967)          -
 Proceeds from exercise of options                    -             250,000
 Capital withdrawals by minority interest          (371,000)       (353,584)
 Net cash used in financing activities             (506,967)       (103,584)
                                
 Net increase (decrease) in cash                    309,327         166,606
 Cash at beginning of period                        470,313         593,473
 Cash at end of period                          $   779,640     $   760,079
                                
                                
                                
                                
The accompanying notes are an integral part of these statements.
                                
                                
                                
                                
                                
                               (5)
<PAGE>            
           THE SHERWOOD GROUP, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)
                                
                         August 31, 1996

Note 1 - Business and organization

   The   Sherwood  Group,  Inc.  and  its  subsidiaries  (the
"Company")  are primarily engaged in the securities business  and
in  providing  related financial services.   The  Company  has  a
principal   registered  broker-dealer  wholly  owned  subsidiary,
Sherwood  Securities  Corp.  ("Sherwood  Securities").   National
Discount Brokers ("NDB"), another registered broker-dealer, is  a
division of the Company's wholly owned subsidiary, Triak Services
Corp.  The Company has a 60% special limited partnership interest
in  Equitrade  Partners ("Equitrade"), which is a specialist  for
securities  listed on The New York Stock Exchange.  In  addition,
Sherwood Securities is a specialist for securities listed on  the
American  Stock Exchange.  During May 1996, the Company commenced
operations of a new wholly owned subsidiary,  Market Distribution
Concepts  Inc.  ("MDC").   MDC delivers  comprehensive  technical
solutions to trading firms and individuals.

Note 2 - Basis of presentation

     The accompanying unaudited consolidated financial statements
do  not  include  all of the information and  notes  required  by
generally    accepted   accounting   principles   for    complete
consolidated financial statements.  In the opinion of management,
all  adjustments considered necessary for a fair presentation  of
consolidated  financial condition and results of  operations  for
the periods presented have been included.  All adjustments are of
a  normal  and  recurring  nature.  It is  suggested  that  these
consolidated financial statements be read in conjunction with the
consolidated financial statements and the related notes  included
in  the Company's 1996 Annual Report on Form 10-K.  Certain prior
year  amounts  have been reclassified to conform with  the  three
months ended August 31, 1996 presentation.

Note 3 - Net income per common share

      Net  income per common share is computed using the weighted
average  number  of  shares  of common  stock  and  common  stock
equivalents outstanding.  Common stock equivalents include  stock
issuable  under  stock  options.  The treasury  stock  method  of
accounting was used in computing the common stock equivalents for
the computation of earnings per common share.

Note 4 - Commitments and contingencies

      Certain  significant  legal proceedings  and  matters  were
previously disclosed in the Company's 1996 Annual Report on  Form
10-K.  In addition, the Company's subsidiaries, and in some cases
the  Company,  have  been named as defendants  in  lawsuits  that
allege  violations  of Federal and state securities  and  related
laws.  Although there can be no assurance that such lawsuits  and
investigations  involving the Company are not likely  to  have  a
material,  adverse  effect on the results of  operations  of  the
Company  in  any future period, depending in part on the  results
for  such  period,  based  on  information  currently  available,
management  of  the Company believes that any such  lawsuits  and
investigations  are not likely to have a material adverse  effect
on the consolidated financial condition and results of operations
or liquidity of the Company.

Note 5 - Net capital requirements

      As  registered broker-dealers, Sherwood Securities, NDB and
Equitrade  are subject to the Securities and Exchange  Commission
Uniform  Net Capital Rule 15c3-1 (the "Rule").  As of August  31,
1996,  the  net capital of Sherwood Securities, NDB and Equitrade
exceeded  their  required net capital by $31,956,000,  $4,451,000
and $18,508,000, respectively.

      The  Rule  also  provides that equity capital  may  not  be
withdrawn or cash dividends be paid if the resulting net  capital
of  a  broker-dealer would be less than the amount required under
the  Rule.  Accordingly,  at August  31,  1996,  the  payment  of
dividends and advances to the Company by Sherwood Securities, NDB
and   Equitrade   is  limited  to  $31,756,000,  $4,369,000   and
$18,458,000,  respectively, under the most restrictive  of  these
requirements. The Securities and Exchange Commission ("SEC") may,
by  order,  restrict the withdrawal of equity capital  on  a  net
basis  if  the  SEC  determines that  such  withdrawal  would  be
detrimental  to  the financial integrity of the broker-dealer  or
the financial community.

                               (6)

<PAGE>
Item - 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS


Results of Operations

      The  results  of The Sherwood Group, Inc. and  subsidiaries
(the  "Company")  for  the three months  ended  August  31,  1996
reflect  primarily  the activities of Sherwood  Securities  Corp.
("Sherwood  Securities"), National Discount  Brokers  ("NDB"),  a
division  of  the  Company's  subsidiary,  Triak  Services  Corp.
("Triak")   and   Equitrade  Partners  ("Equitrade").    Sherwood
Securities is primarily engaged in the securities business  as  a
wholesale market maker in NASDAQ National Market System and Small-
Cap   securities.   NDB  is  a  deep  discount   brokerage   firm
specializing  in  trade  execution for individual  investors  and
Equitrade is a registered specialist in equity securities on  The
New  York Stock Exchange ("NYSE").  During May 1996, the  Company
commenced  operations  of a new wholly owned  subsidiary,  Market
Distribution  Concepts Inc. ("MDC").  MDC delivers  comprehensive
technical solutions to trading firms and individuals.

      The  Company's consolidated net income for the three months
ended  August 31, 1996 was $3,003,000 compared to $4,468,000  for
the  three  months ended August 31, 1995.  For the quarter  ended
August  31, 1996, the principal subsidiaries, Sherwood Securities
and   Triak   had   net  income  of   $3,120,000   and   $78,000,
respectively, compared to net income of $2,971,000  and  $811,000
for  the  quarter ended August 31, 1995, respectively.  Equitrade
had  a  net profit of $400,000 for the three months ended  August
31,  1996 (of which the Company's share was $386,000) as compared
to  a  net profit of $2,204,000 for the three months ended August
31, 1995 (of which the Company's share was $1,403,000).

      Total  revenue  for the Company increased by  approximately
$3,241,000, or 8%, for the three months ended August 31, 1996, as
compared with the previous year.  The reasons for the increase in
revenues are set forth below.

       Revenue   from  firm  securities  transactions   increased
$393,000, or 1%, for the three months ended August 31,  1996,  as
compared  with the previous year.  Revenues from firm  securities
transactions   at  Sherwood  Securities  increased  approximately
$2,882,000, or 11%, for the three month period ended  August  31,
1996  when compared to the prior year, while Sherwood Securities'
overall  trading volume increased approximately 3% for  the  same
period.   This increase in trading volume along with an  increase
in  the average number of shares per ticket led to an increase in
opportunities which resulted in trading profits.  The increase in
revenues from firm securities transactions at Sherwood Securities
was  largely  offset by a decline of $2,484,000 in revenues  from
firm securities transactions at Equitrade which was primarily due
to trading losses sustained.

     The Company's commission income, primarily generated by NDB,
increased  by  approximately $1,461,000, or 23%,  for  the  three
months  ended August 31, 1996 when compared with the prior  year.
The  increase is due largely to the fact that NDB's average daily
ticket  count increased from approximately 3,700 to 4,400 tickets
per  day,  an increase of 20%, for the three months ended  August
31, 1996 when compared with the previous year.

      Floor brokerage income increased by approximately $444,000,
or  18%,  from $2,494,000 for the three months ended  August  31,
1995  to  $2,938,000 for the three months ended August 31,  1996.
The  majority  of  the  increase came from a  $439,000,  or  18%,
increase  in floor brokerage income at Equitrade, which  resulted
from an increase in the number of stocks in which Equitrade is  a
specialist, from 82 stocks at May 31, 1995 to 97 stocks at August
31, 1996.

      The  principal  portion of equity loss in  partnerships  is
equity income from the Company's 49% limited partnership interest
in Anvil Institutional Services Company.








                               (7)
<PAGE>
     Interest income increased by approximately $673,000, or 51%,
for  the  three months ended August 31, 1996 as compared  to  the
previous  year.   The  increase is due to a significant  rise  in
NDB's  customer debit and credit balances held with the Company's
clearing  broker and to an increase in the agreed upon rate  used
to  compute  interest  earned on such  customer  balances.   Also
contributing  to  the  increase were the availability  of  larger
amounts  of  cash  for  investment as well as  to  higher  market
interest rates.

      Fee  income  increased by $196,000, or 85%, for  the  three
months  ended August 31, 1996 as compared to the prior year.  The
increase  is due to larger 12b-1 fees received from mutual  funds
as  NDB's customers' balances in those funds have increased since
the prior year.

      Total  expenses for the three months ended August 31,  1996
increased  approximately $5,182,000, or 16%, from $31,773,000  in
1995  to  $36,955,000 in 1996.  The reasons for the  increase  in
expenses are set forth below.

     Compensation and benefits increased $2,981,000, or 25%, for
the three month period ended August 31, 1996 compared with the
prior year.  The increase is due primarily to higher commissions
paid to traders and salespeople because of higher trading profits
at Sherwood Securities and to an increase in office salaries and
related benefits due principally to a 20% increase in NDB's staff
size.

     Clearing and related charges increased by approximately
$150,000, or 1%, for the three month period ended August 31,
1996, as compared to the prior year.  The increase was due
principally to the operations of NDB for which clearance charges
rose by approximately $509,000 during the three months ended
August 31, 1996 compared to the three months ended August 31,
1995 due to the increase in the volume of transactions.  This was
offset by a decline of approximately $298,000 in clearance and
execution charges on Sherwood Securities' OTC market making
activities.

      Communications expense increased by approximately $498,000,
or 22%, for the three months ended August 31, 1996 as compared to
the previous year.  The increase was mainly due to an increase in
the  activities of NDB, primarily the implementation of its 1-800
customer  quotation service, as well as to an increase  in  other
quotations expense.

      Depreciation  and amortization increased  by  approximately
$462,000, or 91%,  for the three months ended August 31, 1996  as
compared  to the prior year.  This increase can be attributed  to
capital  expenditures incurred in connection with the  relocation
of NDB's and SSC's headquarters.

      Occupancy and equipment rental expenses increased  $23,000,
or  3%,  for  the three month period ended August  31,  1996,  as
compared  to  the  prior year.  The increase  is  due  to  higher
occupancy rates incurred as a result of the relocation  of  NDB's
main offices.

      Other  expenses increased by approximately  $1,034,000,  or
46%,  for  the three months ended August 31, 1996 as compared  to
the  prior  year.   The  increase was due,  specifically,  to  an
increase  in  advertising expense and, generally, to the  overall
increase in the volume of business and an increase in staff size.

     Interest expense increased by approximately $35,000, or 93%,
for  the  three months ended August 31, 1996 as compared  to  the
previous  year  due to the operations of Equitrade,  which  holds
secured demand notes with third parties.

       Income   of  Equitrade  allocated  to  minority   partners
represents the share of Equitrade's net income allocated  to  the
minority  partners during the three months ended August 31,  1996
and 1995, respectively.

       The   Company's   effective  tax   rate   increased   from
approximately 38% for the three months ended August 31,  1995  to
approximately  50% for the three months ended  August  31,  1996.
The  difference  in  the  rates is  due  to  the  timing  of  the
deductibility of certain items subject to different treatment for
book  and  tax  purposes such as depreciation  and  amortization,
meals and entertainment, bonuses and rent expense.







                               (8)
<PAGE>
Liquidity

      The  Company's tangible assets are highly liquid with  more
than  73%  of these tangible assets consisting of cash or  assets
readily  convertible  into cash.  The Company's  operations  have
generally  been  financed  by  internally  generated  funds.   In
addition,  at  August  31,  1996, margin  account  borrowings  of
approximately $145,000,000 were available to the Company from its
clearing brokers.

      The  Company's broker-dealer entities, Sherwood Securities,
NDB  and  Equitrade,  are  subject to  the  minimum  net  capital
requirement  of the SEC which is designed to measure the  general
financial  soundness  and  liquidity of  broker-dealers.   As  of
August  31,  1996,  Sherwood Securities, NDB  and  Equitrade  had
approximately    $31,956,000,   $4,451,000    and    $18,508,000,
respectively, in excess of the required minimum net capital.  The
net  capital  rule imposes financial restrictions  upon  Sherwood
Securities'  NDB's  and Equitrade's businesses  which  are  more
severe than those imposed on most other businesses.

     Cash flows from operations will vary on a daily basis as the
Company's   portfolio  of  marketable  securities  changes.   The
Company's  ability  to convert marketable securities  owned  into
cash is determined by the depth of the market and the size of the
Company's  security  positions in relation to  the  market  as  a
whole.   The  portfolio mix also affects the  regulatory  capital
requirements  imposed on Sherwood Securities, NDB  and  Equitrade
which  directly  affects  the  amount  of  funds  available   for
operating, investing and financing activities.

      In  connection  with the relocation of  NDB's  headquarters
scheduled   for   late-1996,  the  Company   made   deposits   of
approximately $1,000,000 on various fixed assets, accounting  for
the  increase in other assets reflected on the statement of  cash
flows  for the three months ended August 31, 1996.  Additionally,
fixed  assets of approximately $500,000 were purchased and placed
into  service  by NDB during the quarter ended August  31,  1996.
The   Company   anticipates  that  it  will  spend  approximately
$5,000,000  in  total  over the next 18 months  for  the  ongoing
upgrade  of  NDB's technological infrastructure  and  intends  to
finance this upgrade out of internally generated funds.

      In  connection with the commencement of operations of  MDC,
the  Company expended approximately $400,000 for operating  costs
and  purchases  of  fixed assets during the  three  months  ended
August  31,  1996.  The Company anticipates that  it  will  spend
approximately  $2,000,000  in  total  over  the  next   year   in
establishing  MDC  and intends to finance this  activity  out  of
internally generated funds.

      The  operations  of the Company's American  Stock  Exchange
Specialist book continue to be funded by the income generated  by
the book.

      Cash  flows  from the Company's investment  activities  are
directly  related to market conditions.  On August 13, 1996,  the
Company purchased 100,000 restricted shares of Intra Serve  Corp.
for $100,000.

      During July 1996, Equitrade purchased an additional seat on
the  NYSE  for  $1,450,000.   No additional  seat  purchases  are
expected at this time.

      During  the three months ended August 31, 1996, the Company
repurchased  12,571  additional shares  in  connection  with  its
December  1992  plan to buy back up to 1,500,000  shares  of  the
Company's  common stock from time to time in the open  market  or
through  privately negotiated transactions.   As  of  August  31,
1996, 1,025,271 shares had been reacquired under this plan.   The
source of funds for these purchases were internally generated.


Effects of Inflation

      The  Company's  assets  are not significantly  affected  by
inflation   because  they  are  primarily  monetary  in   nature.
Management   believes  that  replacement  costs   of   furniture,
equipment  and leasehold improvements will not materially  affect
operations.  However, the rate of inflation affects the Company's
principal  expenses  such  as  employee  compensation,  rent  and
communication,   which  may  not  be  readily  recoverable   from
increased  revenues.   Because of market forces  and  competitive
conditions  in  the securities industry, a broker-dealer  may  be
unable to unilaterally increase spreads and commissions in  order
to  recover  increased costs related to inflation.  Consequently,
the  Company  must  rely on increased volume  for  this  purpose.
However,  the  Company has significant cash balances  on  deposit
with  its  principal clearing brokers on which interest  is  paid
which,  in  the  event  there  are higher  interest  rates  which
normally result from inflation, would offset some of the costs.

                                (9)
                                
<PAGE>
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

            (a) Exhibits:

                Exhibit 11 - Computation of Earnings Per Share

                Exhibit 27 - Financial Data Schedule

            (b) The Company filed no reports on Form 8-K during
                  the quarter ended August 31, 1996.














































                              (10)
                                
<PAGE>
                          SIGNATURES


Pursuant  to the requirements of the Securities Exchange  Act  of
1934, the Registrant has duly caused this report to be signed  on
its behalf by the undersigned thereunto duly authorized.



                                        The Sherwood Group, Inc.
                                        ---------------------------------

   Date: October 7, 1996                By: /s/ Dennis Marino
   ----------------------------         --------------------------------
                                        Dennis Marino
                                        Executive Vice President
                                        and Chief Administrative Officer


   Date: October 7, 1996                By: /s/ Denise Isaac
   -----------------------------        --------------------------------
                                        Denise Isaac
                                        Chief Financial Officer and
                                        Principal Accounting Officer
































                              (11)
                                
                                


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