Subject: File No. S7-12-06
From: Franco Mortarotti

December 12, 2006

Dear Sirs;

We would like to express our concern over the proposed rule change on the up tick rule. Though studies have shown that there were no material effect on stock prices in the study, It is quite obvious that this will lead to bear raids on stocks in the future, especially during a changing economic environment.

Secondly, we praise your consideration of the abolition of the grandfather rule in Reg-SHO, this is long over due. And we look forward to hearing defining remarks in the upcoming months, especially on how you will close out each position (aged, and grand-fathered) and what harsher action you will take against upholding this rule.


Franco Mortarotti
Zermatt Capital Management