Date:    3/30/99  11:40 AM

Subject: Comments Re: File No. S7-8-99

I have just received and read the NASDR's letter dated 3/12/99 about the SEC's 
proposed rules on operational capability requirements and the year 2000 
compliance.
     
First, please be advised that our firm expects to have no difficulty complying 
with the rule as proposed.  However, it does seem to us that for firms working 
against a 12/31/99 deadline a sudden imposition of a 8/31/99 deadline is a bit 
unreasonable.  We read the proposed rule to imply that if a firm has not 
completely converted their systems to Year 2000 compliant systems, they will be 
subject to the notification requirements as proposed.  We assume this would 
apply to a firm running dual environments for the purpose of testing their Y2K 
compliant software, even if such a testing procedure had been ongoing for some 
time and had not produced any serious issues.  
     
We do not disagree with the intent of the proposed rule, however, our point is 
that such a deadline should have been imposed several months or even years ahead
of this time.  To do so now would seem to us to place an unnecessary 
administrative and reporting burden on those firms that are well in control of 
their Y2K issues yet are not completely converted by 8/31/99.
     
Thank you.
     
John C Downing
H M Payson & Co.
B/D 2993