Subject: File No. S7-08-09
From: Mark Taylor

June 12, 2009

To the SEC:

Simply, short selling as it stands now, destoys capital at pace that lacks common sense. Price discovery need not be so immediate as to increase volatility as an equities price drops. What investor in the free makets wants to participate in something where they can be exposed to short selling, who for some now, exists only to destroy a company or a name in order to profit? I've seen where money flow into the NYSE and NASDAQ have fallen off since July of 2007, and you have seen it too.

If true investors decide they want to exit their long positions on a security because of bad news for the company or name, then the price should fall, and short selling be done in a proper form. However, to the contrary, a security should not fall as a result of many short sellers ganging up on a stock to drive down the price. The one and only reason for this is because it is purely not sensible for markets to behave that way.

You have to ask yourself what do you want the function of an active trading market to be. If you want it to find price discovery at the fastest route possible, with increased volatility, and allows for capital destruction that often overshoots what should be a depreciation in value then that is what we have now. However, if you want a more stable market, with more participants, and price rises and drops in equities that relate to fundamentals then you need to alter short selling.

The uptick rule simply slows the fall of a price in the stock. If a stock is trading at too high a price compared to what the market thinks it should, it will fall, but it shouldn't be allowed to be crushed with a quickness as that undermines the confidence of a significant portion of participants who want to enter the market.

Its the 21st century, I'm sure you will find a way to reinstate the uptick rule using computers and not worrying about decimal trades. If a stock is trading in decimals anyway, shorts can wait for it to rise the 1 cent anyway. Obviously if you reinstate the uptick rule, you will have to do away with the ETF's that short the market as they would be the farthest away from common sense if you believe they exist to find price discovery. Ultrashort ETF's like FAZ are just a "play" and there is nothing stable about them.

Unrestricted Short Selling=Lack Of Common Sense


Mark J. Taylor