Subject: File No. S7-12-06
From: Ralph A. King

September 4, 2006

Regarding Sho, and the Grandfather clause:

There should be no grandfather clause to SHO, and to have one, comes accross as the SEC having more concern for the brokers, hedge funds verus the investors.

If no counterfeiting of securities by anyone, there should not be a need for a Grandfather clause.

If small cap securities would change, it would not invite fraud in the market place.

If pink sheet stocks as an example, could not have more than 500 million O/S until a PPS of .50 is obtained, that would go along way in curbing fraud by the Pink sheet owners, and from the Brokers.

The present format for sub-penny stocks is so geared to allow fraud by all parties.

Thank You, Ralph King.