Subject: File No. S7-12-06
From: Steven L Crowther

August 7, 2006

Thank you for soliciting individual investor comments regarding Regulation SHO. The only way to make the Regulation work effectively is to implement the following:

1. Eliminate the Grandfather Clause.
2. Eliminate the market maker exception (options market makers).
3. Require a "pre-borrow" for short sales (locate does not work).
4. Require the actual number of Fail to Deliver be posted daily by the SRO or the SEC.
5. Severe financial penalties for non-compliance with the rules.

Enforcement and penalties is key to stopping this fraudulent practice. The penalties must be spelled out in the regulation. Allowing exemptions for market makers is a recipe for disaster. No exemptions The equities market, not the options market, is what needs to be protected. Shine a light on the evildoers and make the information available to the investing public in a timely fashion. Anyone who owns real shares but for some reason, cant deliver shares in T-3 days should pay a specified penalty for each day they fail to deliver. Anyone selling shares they dont own or havent borrowed needs to be treated as a criminal.