Subject: File No. S7-19-07
From: Franco A Mortarotti
Affiliation: Director, Zermatt Capital Management

August 29, 2007


We would like to voice our concern relating to any loopholes in regulation that allows any individual or organization, whether it be an options market maker or large hedge fund to fail on covering failed short positions. The markets should be balanced, and if they are getting to the point of failing, then it is not balanced. Further, eliminating the uptick rule, has facilitated bear raids, in which we have seen since the rule was implemented, that should be reversed as well. We are against failed shorts, close out the loopholes, and cover the failed shorts. The rules governing these conditions have worked well for almost 75 years, revert back to those regulations.


Franco A. Mortarotti
Zermatt Capital Management