From: Samuel Yoon []
Sent: December 26, 2004
Subject: File No. S7-23-03

Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Re: File No. S7-23-03 / Regulation SHO

I am writing to express my deepest concern over the changes proposed by Regulation SHO and what it would mean for the average investor in the equity markets. What concerns me most about Regulation SHO is the institution of a new uniform bid test rule allowing short sales to be affected at a price one cent above the consolidated best bid rather than by the current uptick rule, while market makers will still be able to short whenever they please. As a proprietary trader, I firmly believe that any rules that act to restrict the natural equilibrium between buyers and sellers creates a situation where markets can be unfairly manipulated by the larger players at the expense of the general investor.

At a time when the public is already weary of indiscretions on the part of the large financial institutions over the past several years, these changes will only act to further open the door to new types of manipulation. Many of the so-called market makers who would benefit from this rule are often times acting on their own behalf, rather than actually providing a fair and orderly market for any particular stock. Buyers who put in a bid do not care about whether the stock they are getting is a result of a true sale or a short sale. They care about getting the right price in a fluid and liquid market. If the proposed rules went into effect, I believe that the fluidity and liquidity of the market will be drastically reduced while giving the large market makers an overwhelming advantage in pushing around the price of a stock in any direction they please.

I hope you will consider these arguments while making your determination on whether Regulation SHO is appropriate. The equity market is currently a liquid, competitive market where all buyers and sellers determine prices, big and small. I firmly believe that the changes proposed go a long way in reducing those aspects of the market, making it an uneven playing field where the average investor is left out. Thank you for your time.


Samuel J. Yoon
Registered Representative, NASD