Subject: File No. 4-639
From: Peter Rosten

October 14, 2011

To whom it may concern,

I have been involved with micro-cap securities for the last fifteen years and have seen the changes firsthand. What has taken place more recently has prevented many micro-cap companies from raising capital which in turn prevents them from hiring, growing and helping our economy.

The restrictions placed on micro-cap issuers, mainly ones who issue stock in certificate form is causing an obstruction in the capital markets due to the difficulty in processing, delivering and settling these transactions.

Additionally, the DTCC margin requirements on clearing firms can in some cases require a 100 times the value of the trade to be placed in escrow until the trade settles. I.e. someone selling 100,000,000 shares of a stock that trades at .0001 has a value of $10,000.00. The clearing firm obligation would be upwards of one million dollars on this transaction.

Now, you might ask why would a stock trade at .0001, but that is not a fair question. Who are we to determine whether a company is viable because of its stock price alone. Did the regulators force clearing firms to require 100x the value of transactions in Citigroup (symbol C) when the stock traded below a $1 per share?

The bottleneck that has been caused in this deliberate attempt to pick the winners and losers is an unfair practice that should be left to the capital markets to determine.

I am fully in favor of ridding the micro-cap world of fraud and making the market more transparent, but this an attempt to eliminate micro-cap companies from trading in the public marketplace and that could have very severe implications on the ability of this economy and not to mention the exact opposite of what the capital markets are supposed to provide.


Concerned Investor and Market Maker