June 29, 1999
(415) 765-2945

Mr. Jonathan G. Katz,
Securities and Exchange Commission,
450 Fifth Street, N.W., Stop 6-9,
Washington, D.C. 20549

The Regulation of Securities Offerings -- File No. S7-30-98

Dear Mr. Katz: UnionBanCal Corporation supports the Securities and Exchange Commission's (" SEC") goals of protecting investors and ensuring that the securities markets are fair and honest while sustaining the largest most efficient capital market in the world. We agree that only by promoting adequate and effective disclosure of information to the investing public can all of these goals be met. We applaud the SEC's initiative to modernize and clarify our current regulatory structure and the herculean effort of its staff in this undertaking. However, we do have some practical concerns with some of the proposals, as outlined below.

We fully support initiatives to increase meaningful disclosure to our investors and require board members to monitor the financial statements and other securities documents of their corporations. However, we are concerned that the substantially increased administrative and procedural burden imposed by the proposed initiatives, taken with increased legal liability, may make it difficult, if not impossible, to recruit and retain qualified directors. In addition, many aspects of the proposal will overload the Board and drown audit committee members and other board members in procedural tasks, decreasing their ability to perform their fiduciary duty of oversight of the companies activities, including compliance with many other federal, state and local laws. We believe, therefore, that additional increases in board member liability, as proposed, will likely thwart the board's main objective of maximizing shareholder value in the long term.

Changes to Periodic Reporting under the Securities Exchange Act of 1934

We support the SEC's initiatives such as providing timely information to investors on Form 8-K, periodic risk factor disclosures and your shift in focus to 1934 Act filings. However, a number of proposals, such as treating quarterly information as filed under Section 18 of the 1934 Act, signature requirements for Form 10-Qs, the filing of audit committee reports and modifications to the SEC comment process will not produce the desired results.

First, we are concerned with the SEC's proposal to treat quarterly reports as filed for purposes of Section 18 of the 1934 Act. Given the increasing prevalence of frivolous shareholder litigation, as demonstrated by the record number of such suits filed in 1998, particularly in the 9th Circuit, this proposal will not enhance quarterly disclosure. Treating quarterly reports as filed would create an atmosphere of extreme conservatism in quarterly financial reporting. The impact would be the elimination of all projections, plans and strategies from quarterly disclosures due to the threat of frivolous shareholder litigation and an increase in legal disclaimer language. Further, the elimination of these types of disclosure from quarterly filings would push them even further into the realm of oral communications.

In addition, we also feel that the proposal to require all members of a company' s board of directors to sign all quarterly filings would not provide shareholders with any more protection or information than is currently provided while greatly increasing the administrative overload on directors.

We are also concerned by your proposal to require the filing of audit committee reports. Often topics discussed in these reports are covered by attorney-client privilege, are proprietary in nature or are extraordinarily complex, particularly for financial services firms such as ours. The public disclosure of this information could lead to the release of highly sensitive competitive information and would likely create confusion for individual investors and shareholders. As a practical matter, filed audit committee reports would be reduced to meaningless summaries due to legal liability concerns and would potentially inhibit audit committees from participating in frank discussion and the free-flow of ideas necessary to perform their fiduciary responsibilities. Additionally, the cost of reviewing the audit report for public disclosure and the filing of such information would far outweigh the relative benefits to our shareholders.

The shift in focus to 1934 Act reports, while difficult in transition, will greatly increase the quality of all financial disclosure going forward. We support the extension of plain English requirements to 1934 Act filings and in fact have already taken large steps to conform our 1934 Act reports to plain English. We do not, however, believe that the SEC can play the role of language police. In this regard, we are concerned with the SEC Division of Corporate Finance's proposed ability to hold up offerings because of potentially non-material outstanding comments, such as plain English. We suggest having a multi-tiered comment rating system whereby Division of Corporation Finance staff could issue 1) non-material comments, such as plain English comments, to be corrected in a future filing, or 2) material comments that would have to be corrected prior to effectiveness of a registration statement.

We support the proposal to file Regulation S-K, Item 301 information on Form 8-K concurrently with our quarterly financial press release. This proposal is far superior, less costly to us and more informative to investors than the proposal to accelerate filing dates for 10-Ks and 10-Qs, particularly if quarterly reports are treated as filed. Accelerated filing dates would cause undo costs because of increased fees to outside accountants for expedited review as well as additional time and fees paid to outside accountants for additional assurance in connection with quarterly filings if they are treated as filed. The 8-K proposal on the other hand, would lead to timely, standardized, and comparable financial disclosures by all public companies while adding little expense to our already extensive regulatory burden.

We also support the proposal to add risk factor disclosure to 1934 Act filings, particularly if new Forms A, B and C are adopted. We believe risk factor disclosure will provide our investors with a more complete picture of the risk environment in which we operate.

Proposed Changes to Offering Communications and Forms We are concerned about the proposed rule changes effecting offering communications, such as free writing, inclusive prospectus and certification requirements. The practical application of these rule changes will lead to less robust public disclosure, which is the antithesis of the SEC's goals.

Specifically, the proposed filing requirements and inclusive prospectus concept may expose us to Section 11 liability for our underwriter's conduct, which is often outside of our direct control. Additionally, the filing of road show materials will have the opposite effect from its intended purpose because of the forward looking nature of road show material and the failure of the Private Securities Litigation Reform Act of 1995 to protect such statements from frivolous shareholder class action litigation. If the proposal is adopted, companies will become increasingly conservative in written materials, reducing the information made widely available and restricting certain information to oral communications or qualify filed materials with endless disclaimers the result of which will be opaque disclosure unusable by the average investor. Thus, filing requirements for inclusive prospectus and free writing materials will certainly slow down our capital raising efforts and expose us to unnecessary market risks. Finally, the proposed certification to the registration statements would add undue burden to companies, delay the offering process and have little benefit for investors. It is already a significant endeavor to recruit financially astute board members. Increasing the already significant liabilities faced by board members will go along way toward making the recruiting of qualified board members impossible. We do not believe this is in the best interest of our shareholders.

Until additional protection is provided to us from the ever rising mountain of frivolous shareholder litigation cases being filed, any increased liability will have the exact opposite impact from the goals of the SEC. Namely, issuers will cease to provide meaningful disclosure (limiting information to the investing public) and frivolous litigation will continue to rise (reducing the efficiency of our capital markets), both of which will harm US public capital markets competitive position thus driving issuers into alternative markets.

Elimination of the Shelf Registration System

We are concerned about the elimination of the shelf registration process. The current shelf registration process has provided our company and many others with efficient and effective access to the capital markets. The proposed changes to prospectus delivery and filing prior to first sale will introduce undue delay, will add significant expense to our cost of capital and will not provide any benefit to the investing public. The practical issues of preparing and filing a registration statement would be time-consuming and will cause significant market timing issues for us, if adopted as proposed. We believe that preserving the current shelf registration is the best alternative at this time.

Thank you for your time and consideration of these important issues. If you have any questions or would like to discuss any of the items addressed in this letter in further detail, please contact me at (415) 765-2945 or Russell Keefe at (415) 765-2575.

Very truly yours,

x John H. McGuckin, Jr.

John H. McGuckin, Jr.
Executive Vice President
and General Counsel


cc: UnionBanCal Corporation Audit Committee
The Honorable Arthur Levitt, Chairman
The Honorable Norman S. Johnson, Commissioner
The Honorable Isaac C. Hunt, Jr., Commissioner
The Honorable Paul R. Carey, Commissioner
The Honorable Laura S. Unger, Commissioner
Harvey J. Goldschmid, General Counsel, Office of General Counsel
Brian J. Lane, Director, Division of Corporation Finance
Anita T. Klein, Senior Special Counsel, Division of Corporation Finance
Zane Blackburn, Office of the Controller of the Currency
Gerald Edwards, Federal Reserve Board