From: Marc Castonguay
Sent: July 12, 2004
Subject: File No. S7-24-03

Proposed Rule 17Ad-20: Issuer Restrictions of Prohibitions on Ownership by Securities Intermediaries

Jonathan G. Katz, Secretary
Securities and Exchange Commission

We wish to comment on the proposed rule directing transfer agents to ensure that the issuers, for whom they act as transfer agent, continue to allow securities to be transferred into the names of depositories and intermediaries.

It is our understanding that the Commission has recognized the abuses of “naked short selling” and, as a result, has proposed a rule to be implemented early in 2005 for broker/dealers that will address the concerns raised by issuers and investors. The rule should prevent these abuses within the jurisdiction of the Commission.

We believe that there appears to be an issue of sequence between bringing in the rule to correct the “naked short selling” problem and the rule to prevent the only action currently available to the issuers to protect their company’s value and therefore its investors/shareholders from the negative effects of the “naked short selling”.

Accordingly, we suggest that the proposed rule 17Ad-20 be scheduled for implementation approximately 3 to 6 months after the “naked short selling” rules come into effect for the broker/dealers. This will ensure those rules have effectively dealt with the problem and therefore have eliminated the issuers’ need to have the threat of the option to implement the restrictions on the registration of their shares to intermediaries or depositories.

Thank you for your consideration of our comment.

Marc Castonguay
Vice President & CEO
Pacific Corporate Trust Company