July 16, 2001

VIA E-MAIL: rule-comments@sec.gov

Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549-0609

RE : File No. S7-12-01
Definition of Terms in and Specific Exemptions for Banks, Savings Associations, and Savings Banks Under Sections 3(a)(4)( and 3(a)(5) of the Securities Exchange Act of 1934

Secretary Katz,

MidFirst Bank, Oklahoma City, Oklahoma, is pleased to have the opportunity to comment on the Interim Rule regarding the functional exceptions for banks from the definitions of broker and dealer pursuant to the Gramm-Leach-Bliley Act.

MidFirst supports the Security and Exchange Commission's (the "SEC" or "Commission") decision to exempt savings associations and savings banks from the definition of "broker" and "dealer", and the resulting SEC registration requirements, on the same terms and conditions that apply to banks. Extending the exemption to savings associations eliminates a highly technical and inequitable advantage that banks have held over savings associations. Requiring a savings association to register as an Investment Advisor for performing trust activities while the competing local bank that offers identical services is exempt from the rigors and costs of registration is anticompetitive and harmful to both the industry and the consumer. Such inequities preclude market forces from producing efficiently priced and effectively provided services. The proposal to extend the bank exemption from SEC registration requirements to savings associations eliminates these anticompetitive concerns.

MidFirst also asks the Commission to specifically extend the exemption allowed banks, and now savings associations, to all trust- and fiduciary-related activities historically engaged in by financial institutions rather than to require a case-by-case review of individual requests for exemptive relief from banks and savings associations by the Division of Market Regulation. To do otherwise would hinder existing trust activities, would create uncertainty in the market place, and would be counter to specific Congressional intent. Further, as the operations of the banks and savings associations are reviewed and monitored on a routine basis by well-trained regulators, specifically extending the exemption to all trust activities offers tangible benefit with minimal, arguably no, additional risk.

MidFirst also supports reconsideration of the compensation rule to allow flexibility for employees to receive compensation based on factors other than referrals. MidFirst understands the Commission's concern with this issue; however, MidFirst asks the Commission to consider practical and operational facets of many compensation plans. For example, employees should not be precluded from incentive remuneration that is based in part on the success of the financial institution, department, or individual simply because the institution benefited financially from the employee's involvement in the activities addressed by the interim rule.

Sincerely,

Charles R. Lee
Vice President
Director of Bank Administration