Subject: File No. S7-12-06
From: Bruce A Thompson

August 7, 2006

Allowing options market makers to transfer 100% of their risk onto the backs of the stockholders by allowing the manufacture of bogus shares to hedge their options sales is a travesty.

What benefit does the small investor receive for taking the risk off of the Options market maker's sholders?

It is the options market maker who should be taking the risk as they alone are receiving the financial benefits from the sales of these options. The shareholders of the underlying stock are not receiving any of the proceeds so they should not have to endure price hits caused by the massive selling of naked shares into the market by the options market makers every month.

The grandfather clause is a travesty of justice.

Thank you,

Bruce Thompson