Subject: File No. S7-12-06
From: john royce

April 30, 2007

The legal shorting of stocks, since the same registered share can be shorted multiple times, already gives an advantage to the pressure those shorting a stock, particularly one with small liquidity, as opposed to those who hold long positions but that situation is the least of the worries those long in an equity experience.

The increasing spread of naked short positions, which result in FTDs, is spreading at an alarming rate. Since there is little oversight and even less punishment to those benefitting from this situation, serious thought needs to be done regarding eliminating this unfair trading imbalance that those owning shares have suffered for years.

Thank you for any help you might be able to give to correct this problem.


John Royce