Subject: File No. S7-19-07
From: Richard M Hixson

July 18, 2008


Dear Sir/Madam

From the available posted comments, Matt McCloud and James Sinclair have submitted very constructive comments.

However, I personally believe the only way to suppress the problem is the imediate imposition of fines to ANY BROKER who generates "the failure to deliver". The fine should be 10% of the trade for the first day and increases at the rate of 10% per day for a period of 10 days. If the fines are not paid in full within three business days after they have been executed, the broker submitting the failed to delivered trade will not be permitted to clear any trades or orders with the exchange.

All dealers, regardless of their classification should be required to comply to the same standards and zero (NO) exceptions should be permitted. Equal operating rules benefit all and failure to comply requires equal fines without exceptions.

The originating broker should be held accountable for submitting the trade in all cases. If the broker does not have in their possession the certicates when the order is executed they proceed at their own risk. Any generated fines should/could be passed on to the client who requested the trade. This does not eliminate the responsibility of the broker to make payment of any or all fines generated. Failure to conduct business on the exchange or clearing house due to non payment or non delivery is a significant incentive to any broker to increase/enhance internal procedures to prevent the problem from ever occurring.

These restricitions and fines would in my opinion eliminate the current "failure to deliver" problem ASAP. It would apply the same standards to all and prevent the free ride that many are currently using.




Richard M Hixson
Bellaire, TX 77401