From: Dario Cosic [ddcosic@hotmail.com] Sent: Monday, December 29, 2003 1:30 PM To: rule-comments@sec.gov Subject: File No. s7-23-03 December 29, 2003 Mr.. Jonathan G. Katz Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549-0609 File No. s7-23-03 Dear Mr. Katz, My name is Dario Cosic and I have been a registered representative for over 3 years. I am currently employed with Trillium Trading Group and I would like to comment on the proposed changes to the Securities Exchange Act of 1934. After carefully reviewing details of Regulation SHO it is my objective opinion that such proposed changes would unwillingly undermine the small investor like my self. Further, proposed replacements of rules 3b-3, 10a-1 and 10a-2 will substantially impact my professional trading career. In my opinion, short selling on a green arrow has been the cornerstone of the NASDAQ National Market. By requiring that a short sale be affected at least one cent above the best bid would inevitably decrease market liquidity for small investors like myself. Further, It is a well known fact that market makers have the ability to manipulate stock prices by not having to adhere to the same rules of shorting as the small investor. Furthermore, everyone knows that majority of functions performed by Market Makers is done by computer programs that use electronic communication networks ECNs, which can be programmed to adhere to the up-bid rule. Market makers like Goldman Sachs or Merrill Lynch have direct ownership of two largest ECNs, REDI and ARCA. Further, Market Makers' argument that if they were required to wait for an up-bid to make short sales, like everybody else, that would somehow impair their market making functions is completely bogus. Market Makers' further argue that they provide stability by standing ready to buy stock if there is heavy selling pressure by investors. This argument is completely weakened by numerous examples when stocks would decline in very short periods of time with no Market Makers "providing stability" At the end, I would like to argue for the creation of pilot program in order to study the effects of short selling on market volatility. In my opinion, eliminating short selling rule all together in this pilot program would provide SEC with an uncompromising view of how the market would handle the possible removal of the short selling rule. It is my wish and desire that the SEC would consider these issues and concerns while determining its final stand on Regulation SHO. Thank you for you time and consideration. Sincerely, Dario cosic -------------------------------------------------------------------------------- Get reliable dial-up Internet access now with our limited-time introductory offer.