Secretary, Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0609
February 2, 2000
By e-mail to firstname.lastname@example.org
Re: File Number SR-NYSE-99-47
Ladies and Gentlemen:
This letter is written in opposition to, and as an objection to, the proposed implementation of NYSE Rule 431 and NASD Rule 2520.
The proposed revision seeks to increase the minimum margin requirement to $25,000. This is too much too fast.
The proposal is made to "reduce volatility;" yet it provides for an decrease of the daily margin to 25 percent from 50 percent.
In reality, the rule is to restrict free entry into the capital markets which the internet has provided and allow concentration in a select few.
The Wall Street Journal Interactive Edition had an article on November 28, 1999 about Donald Lachot, who built $5,000 over a number of years to $100,000 (while he delivered newspapers). This kind of free enterprise spirit would be crushed by the proposed rule change.
The proposed rule change is ostensibly to protect small investors; yet in our society there are not similar restrictions for persons who want to start a computer store for example, which is very risky.
Education and suitability (as determined by net worth and income) is the proper method to protect investors.
The proposed rule change goes too far too fast. The increase from $2,000 to $25,000 is an enormous percentage increase, and should be rejected.
In order to afford opportunity to everyone, the proposed rule change should be scalable at the very least. If the proposed rule is to be seriously considered, it should be modified to an increasing scale. For example, Investors of $5,000 and below should be allowed to trade daily, but at higher margin of 50 percent. Those investors with accounts higher than $5,000 but less than $25,000 should be required to post 37.5 percent margin. Those with $25,000 and above should be required to post the proposed 25 percent margin.
Please reject the proposed rule change. It is intended to protect vested interests on Wall Street, rather than to open the securities markets to everyone.
Connie and Robert Morrow
2611 Wrightson Drive
Jacksonville, FL 32223