Subject: File No. S7-12-06
From: Jeffery W. Rhoads

August 7, 2006

I find Reg SHO to be totally ineffective. I find no reasonable excuse for a failure to deliver. I have no option to fail to pay, so why should a failure to deliver be tolerated? We should enforce the 1934 law and there wouldn't be a reason to have Reg SHO or any other new regulations.

We should:

-Eliminate grandfathering existing fails.

-Eliminate the exclusion for market makers.

-Equalize data reporting requirements for long sales, short sales, fails to deliver including 5% position requirements.

-Enforce the laws on the books and prevent the SEC and the DTCC from implimenting rules that violate the 1934 Law.

-Make penalities for violating the law sever enough to make them more than a "cost of business" for the prime brokers.

Stop the manipulation