Subject: File No. S7-12-06
From: Boyd L Zander, SE, PE

January 15, 2007

I would like to voice my concern regarding the practice of failing to deliver securities after effecting short sales which essentially creates counterfeit shares. Regulation SHO had been enacted to effectively deal with and eliminate this occurance. While dealing with this issue, SHO also implemented Rule 203(b)(3)(i) commonly called the Grand Father Clause which exempts failures to deliver prior to a set date from any requirement to cover. This creates counterfeit for securities for which failures to deliver exist. In some cases, the number of counterfeit shares that exist reresent a significant proportion of the actual authorized shares.

This is not right and is very problematic from many perspectives. Therefore, I would like to request that you consider and follw through with the elimination of the Grand Father Clause in Regulation SHO.


Boyd L Zander, SE, PE