Subject: File No. S7-32-10
From: Connecticut State Legislators Megna Johnson Ritter
Affiliation: Connecticut General Assembly

November 16, 2010

Mary Schapiro
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

Re: File S7-27-10

Dear Chairwoman Schapiro:

We write to express our serious concern about the proposed Securities and Exchange Commission (SEC) rules in Sections 726 and 765 of the Dodd-Frank Financial Services Reform Act which are in direct contradiction of the recently passed legislation.

One of the key goals of the legislation was to have the SEC adopt clear and tough rules that would help to promote fair and open competition in the trading marketplace. It also sought to have the SEC, through these regulations, mitigate systemic risk and conflicts of interest to ensure that competition remained open and fair.

As members of the Connecticut General Assembly, we strongly oppose allowing dealers to band together under the guise of a 5% cap on ownership by any one entity to avoid a broader class-of-ownership cap. We wrote to our Connecticut legislators during the legislative debate on the bill and continue to strongly believe that the Congressional intent was to prevent the domination of a clearinghouse, swap execution facility or exchange by a small number of dealers.

As you know, the U.S. House of Representatives adopted an amendment that set a maximum cap of 20% voting control of these entities by the dominant dealers in the existing marketplace which was the basis of the Lynch Amendment in the House and Sections 726 and 765 in the final Act.

We urge you to rule on the side of open and meaningful competition. That intent would be erased by providing a loophole that basically allows a mere 11 dealers to dominate the clearinghouse, control a majority of its members, and dictate decisions of the organization by banding together with shared ownership under 5%.

Thank you for the opportunity to submit this testimony to you on the important issue.

Sincerely yours,

State Representative Robert Megna
Connecticut 97th District

State Representative Betsy Ritter
Connecticut 38th District

State Representative Susan Johnson
Connecticut 49th District