April 12, 1999

Jonathan G. Katz

Secretary

Mail Stop 0609

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC 20549-0609

RE: File 57-8-99

Dear Mr. Katz,

Our comments with respect to the recent proposals relating to the year 2000 are limited to proposed temporary Rule 15b7-3T. Our comments concern issues of applicability and suitability the task, as envisioned by the Commission.

In the wake of the Commission not requiring under Rule 17a-5(e) that certain broker-dealers be subjected to filing Part II of from BD-Y2K and having an independent public accountant prepare an agreed-upon procedures report related thereto, we are pleased that the Commission has apparently seen fit to propose a rule that requires broker-dealers handling customer business to be ready for the Year 2000 on a timely basis. In fact, the way the proposal reads, all broker-dealers would be subject to a requirement that they be ready, and if they will not be ready that they cease business even before January 1, 2000.

While on its face, requiring all broker-dealers to be ready is a good idea, further analysis should be conducted so that those broker-dealers that depend upon other broker-dealers for their record keeping and systems, and those broker-dealers not dependent upon any other party be exempted from the impact of the rule.

There are many broker-dealers that trade for their own account, make no markets, and have non contact with customers. We see no compelling reason why the Commission should mandate that they be ready. If they are not ready, it is only they that are likely to be impacted.

With respect to those broker-dealers whose main mission critical systems are supplied and maintained by other broker-dealers, as is the typical relationship between introducing broker-dealers and their clearing broker-dealer, we believe that the Commission should adopt a practical approach to such relationships. As a practical matter, if the records and systems provided by the clearing broker-dealer do not work in the Year 2000, while the Commission might prefer to fault the introducing broker-dealer as indicated in footnote 19 to release 34-41142, it really is beyond the capability of the introducing broker-dealer to ensure that the clearing broker-dealer has systems that work. We believe that is wrong to fault the introducing broker-dealer unless the introducing firm had clear evidence that the clearing broker-dealer will not be able to function.

In this regard, we not that on those rare occasions when a clearing broker-dealer suddenly becomes incapable of performing its functions, the introducing broker-dealers are not generally subjected to regulatory criticism. Rather, they are encouraged by the regulators to seek out financially and operationally capable clearing broker-dealers to whom they can quickly transfer their customer and other business. We believe that the Commissions rules should recognize the practical realities of the introducing broker-dealer/clearing broker-dealer relationship and accordingly should be directed towards the clearing broker where it provides records and systems relied upon by introducing broker-dealers.

Should a broker-dealer provide the Commission and its designated Examining Authority with notice of a potential problem, the regulators will have enough time to take appropriate action. Public availability of the details of a problem could potentially cause a so-called "run on the bank" by inappropriately scaring customers. Furthermore, public availability might reduce the candor necessary for the Commission purposes. It is vitally important that the data be accurate and informative. It is equally important that the general public not be misled by the data.

We appreciate this opportunity to comment on your proposed rules. We would be delighted to address any questions or comments the Commission or its staff might have.

Very truly yours,

Howard Spindel

Managing Director