Subject: comments on proposed rule for canceled certificates

Date:    11/29/2000 2:58 PM
     
     
To: Securities and Exchange Commission
     
Comments on proposed rule File No. S7-18-00
     
To whom it may concern:
     
        We are a group of students from the Business in society class at FIU, as
a 
class assignment we were assigned to investigate a proposed rule and to 
submit comments on it.
We have read the material available and contacted stakeholders who are 
concerned about the turnout of these events.
     
First we would like to say that we consider of very high importance the 
protection of peoples rights, we therefore agree with the re-enforcements 
this rule is trying to achieve.
     
The notion that canceled securities certificates can be stolen and then used 
to deceive the common people, but tricking them into buying certificates 
that are worth less is very concerning to us, and should be to the general 
public. This type of action not only affects the buyer, but it also has a 
deep effect in the economy, which is a concern for all of us.
     
Given that most of the problems come from the moment the securities are 
canceled, we consider that an Internet database should be created. This 
would allow the owner of the certificate who is canceling it to enter the 
information of the canceled certificate before he releases it to the agent 
in charge of transporting it. Also this internet database should have a 
space for the agent to submit the information referring to the certificates 
that his is receiving and transporting, and who ever receives the 
certificates for storing since it is the law to keep them for a period of 
time should also have access to this database so that he can submit the 
information about the certificates that have gone through the process and 
that way closing the chain.
     
By doing this and allowing all of the participants to submit the information 
of all the certificates they deal with, we are ensuring that the process is 
clean and tight. Any lost certificate will point to someone; this way 
stilling the certificate becomes harder.
     
This database would also allow people buying certificates to enter the 
number and information on the certificate and checking its value.
     
I would also like to recommend decreasing the storage time, since the more 
time certificates are exposed the easier it is for them to get lost. There 
for we agree with creating microfilm inventory of the certificates and 
reducing the time the certificates have to wait around after being 
cancelled. This microfilm should include a photo of the certificate before 
and after cancellation.
     
We realize that the idea of the rule is to reduce exposure of the 
certificates, there for we also suggest as a possibility, and to protect the 
general public, that the entity canceling the certificate is the only one, 
which would be involved with them. There for the only one who would have to 
access the database and register the information would be the entity 
canceling the certificate. This one at the same time should record in 
microfilm the certificate both, before and after being cancelled and dispose 
it by destroying it without involving any other entities.
     
We consider that restricting the process to only one entity or person while 
allow a higher control, and reducing the time and number of hands the 
certificate is exposed to, also allows the controlling agency to know where 
the certificate has been and who was last involved with it.
     
Sincerely:
     
Robert Serrano
Casty Guillame
Kian Attai
Dobry Perdomo
Carlos Perry
     
FIU students - Business in Society class.