Subject: File No. S7-21-09
From: Douglas Johnson
Affiliation: not applicable

September 23, 2009

Dear SEC:

What a wonderful start, AND please don't stop. Flash orders do not foster competition, but instead seem to create an electronic venue whereby predetermined interests can interrupt the free market concept and take advantage of many otherwise unsuspecting market participants who would most likely have otherwise received better positions.

The flash order system by any other name resembles a private arbitrage system whose exact intention is to provide an opportunity for transaction control and full market access to only one side of a two party transaction

In the age of human-less electronic program trading, a millisecond window of "preview" is met with an army of state-of-the-art hardware and very dynamic preloaded software that has calculated the "flash arbitrage" profit potential before the order is even placed. This narrow preview gives a select few a very wide advantage, and the majority a consistent disadvantage.

Co-location of trading center servers with exchange servers (or other server co-locations) should be your next consideration (don't stop there either).

Might I also suggest that specialist and market-maker activities be more closely monitored as well since they are now required to be as much on the ask as they are on the bid. Every day there are numerous instances of violations of this requirement.

In addition, please monitor the practice of selectively skipping certain order parameters (such as a limit) that result in a reset of the original order parameters (the spread) and a net gain for a market maker at the expense of the order placer (voice of experience here). I've seen this tactic used as a "protective measure" by market makers.

You also need a system to regulate the regulators. I don't know how many are hoping to later land a compliance job with a hedge fund, but enforcement is undoubtedly a big part of this "systemic" problem.

Thanks for your time.
Douglas Johnson