Subject: File No. 4-627
From: Jon Lukomnik
Affiliation: Executive Director, IRRC Institute

May 9, 2011

-To The Commission:

While the IRRC Institute takes no position with regard to the specific proposals, the institute has sponsored research (attached) which we believe informs the problem the proposals are designed to address.

Put simply, the economic bedrock principle on which our capital market system rests is an alignment of capital at risk and ownership. Developments in the capital markets, including the increased ease of shorting, have frayed that once-strong relationship. As a result, there can be hidden ownership, empty voting, over voting, a reversal of economic interest on behalf of ostensible owners of a company, misrepresentatioon of ownership interest/economic interest in contested situations such as mergers or acquisitions, etc. In addition, at a time when ownership and engagement are increasingly being viewed by policymakers as an integral self-correctiong mechanism in the capital markets, the ability to divorce ownership from economic risk poses threats to that ability.

I therefore re-recommend to the Commission the attached study, conducted by Stanford Law School and sponsored by the IRRC Institute, which was first submitted to the Commission during its call for public comment on the proxy plumbing proposal.

My most sincere thanks for this opportunity to comment,
Jon Lukomnik
Executive Director
IRRC Institute

(Attached File #1: 4627-46.pdf)