From: Paul Floto
Sent: April 2, 2007
To: rule-comments@sec.gov
Subject: File No. S7-12-06


- SEC Regulation 17A(a)(1)(A) -
“The prompt and accurate clearance and settlement of securities transactions, including the transfer of record ownership and the safeguarding of securities and funds related thereto, are necessary for the protection of investors and persons facilitating transactions by and acting on behalf of investors.”

Please explain why Reg.SHO as proposed allows SEC Regulation 17A(a)(1)(A) to be flagrantly violated by options market makers.

Paul Floto Dallas, OR