Subject: File No. S7-19-07
From: N Kyoto27

August 13, 2008

The evidence is clear that the options market maker exemption unfairly discriminates against equity securities investors. In light of Section 6(b)(5) of the Securities Exchange Act of 1934,limiting the Commissions authority in this regard, it is imperative for the Commission to discuss and examine whether REG SHO or the options market maker exemption is unfairly discriminatory. In the absence of any publicized analysis or discussion on this topic, at the very least, the Commission needs to disclose why it feels it to be unnecessary to discuss and publicize this aspect of the exemption. If the Commission has not already done so, a complete analysis should be conducted by the Commission and made public. This public analysis is necessary, because it is clear to just about everyone else but the Commission that the options market maker exemption is unfairly discriminatory (to equity investors like myself) and thus prohibited by Section 6(b)(5) of the Securities Exchange Act of 1934. Because of the discriminatory effect of the market maker exemption, it must be eliminated. The Commission has stated that the main beneficiaries of the rule are options markets: The options market maker exception was created to address concerns regarding liquidity and the pricing of options. Release No. 3456213. Since the Commission is discussing the beneficiaries publicly,why does the Commission not complete the picture and discuss those who are adversely
affected?

The simplest and best way to reduce the enormous cost burden thrown onto the equity securities markets is to eliminate the options market maker exemption. Derivative markets need to solve their liquidity issues while appropriately valuing the derivatives, without any hidden subsidy by equities investors as is the current scheme.

Chairman Cox clearly said the SEC has the interests of individual equity investors at heart and the time has come to back the SECs words with actions. Cmon, the free lunch program has lasted long enough for hedge funds and OMMs