October 1, 1997
     
Jonathan G. Katz, Secretary
United States Securities & Exchange Commission 
450 Fifth St., N.W.
Washington DC 20549
     
     
 Via e-mail to: rule-comments@sec.gov
     
    File No. S7-16-97
         Release No. 34-38672
         Concept Release on regulation of exchanges 
         and other markets

Dear Mr. Katz:
     
This letter supplements my original comment letter dated July 14, 1997
 to the Commission on the above-captioned Release.
     
On the Commission's Web site, an additional document, "An overview of 
the SEC's role in regulating markets and of the issues addressed in the 
release" (http://www.sec.gov/rules/extra/regmark.htm), was made 
available on September 4, 1997. This new document "...summarizes the 
concept release."  However, the concept release discusses "...two ways 
to address the SEC's concerns about electronic trading systems."   It 
then lists these as: "First Alternative: Creating Three Tiers of 
Exchange Regulation," and "Second Alternative: Enhanced Regulation as 
Brokers."
     
However, the summary does not mention a third alternative (discussed 
first in the concept release).  I presume this was a clerical 
oversight.  However, since the Commission's disclosure policies 
include a strict prohibition against the omission of a material fact, 
I believe this summary document would be more accurate if it included 
this alternative, as stated in the concept release:
     
 "As an initial matter, the Commission is soliciting comment on 
 whether the current statutory and regulatory framework remains 
 appropriate in light of the myriad new means of trading securities 
 made possible by emerging and evolving technologies."
     
This alternative tracks the legislative text.  (Section 11A(a)(3)(C) 
of the Securities Exchange Act) states:
     
          "The Commission is authorized...to conduct studies and make 
          recommendations to the Congress from time to time as to the 
          possible need for modifications of the scheme of 
          self-regulation provided for in this title so as to adapt it 
          to a national market system." 
     
Since the Commission proposes possible modifications of the scheme for 
self-regulation in the concept release, it would seem appropriate to 
disciuss the alternative of making "...recommendations to Congress for 
modifications of the scheme of self-regulation..."
     
I would respectfully suggest the Commission consider revising the 
summary document to include this alternative.   My frequent co-author 
and colleague, Professor Morris Mendelson of the Wharton School, has 
asked me to let the Commissaion know he agrees with my views.
     
Very truly yours,
     
     
/s/ Junius W. Peake
     
     
Junius W. Peake
Monfort Distinguished Professor of Finance 
University of Northern Colorado
1075 F Kepner Hall
Greeley CO 80639-0001
Telephone: 970-351-2737  Fax: 970-351-1062 
e-mail: jpeake@unco.edu
home page: http://www.coba.unco.edu/bafn/fac/peake/peake.htm