George D. Bates, Esq.
Financial & Operations Principal
Bates Securities, Inc.
6019 Fincham Drive
Rockford, Illinois 61107
Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street N.W.
Mail Stop 6-9
Washington, D.C. 20549
Re: File Number S7-27-96 (Books and Records Requirements for Brokers and
Dear Mr. Katz:
In NASD notice to members 96-80 the SEC invited comments on the Commission's proposed changes to Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934. The comment period was extended to March 31, 1997. This letter's purpose is to inform you and the Commission of this firm's response to the proposed changes.
Initially, when I read of the proposed changes, I presumed that there were several items which would materially affect this firm. While I believe this firm goes the extra step in gathering client information and executing transactions on behalf of its clientele, I concluded that our paperwork would dramatically increase and many of our client and corporate forms would undergo changes. Contrary to the assertions in the summary publication of the SEC as published in 17 CFR Part 240, I concluded that there would be vastly expensive and time consuming changes which would affect each registered representative of this firm. The "Total Annual Reporting and Record keeping Burden" conclusions are not grounded in fact nor reality. However, after reading many of the responses which you have received and have been published on the Internet, I concluded that I would not offer a further detailed analysis of the numerous problems and ill-conceived ideas as found in the proposed changes. Rather, I would like my letter to be considered as an echo of many of the criticisms as found in other NASD members replies to the SEC.
Accordingly, please advise the Commission of these comments and respectfully requests that the Commission not implement the Amendments to 17a-3 and 17a-4 as currently proposed. If you have any questions of comments, please feel free to contact my office as indicated above.
George D. Bates