Subject: File No. SR-FINRA-2009-040
From: Douglas W. Schriner
Affiliation: CEO, Harrison Douglas, Inc., FINRA Dist 3 Committee Chair

July 20, 2009

It is up to the Federal Reserve to set margin requirements as a function of managing risk in the system. It is also up to the individual rep and his/her client to determine appropriate leverage for an individual transaction (within the regulatory parameters in force at the time). You can NOT regulate risk out of the marketplace, only provide education, guidance and disclosure. Speculators exist to provide liquidity for legitimate hedges. If speculators want to bet the farm, that is their decision, it is STILL a free market. If the firm can't cover the trade, then regulation must step in and take an active role. But to set leverage standards by regulatory policy takes away from the Federal Reserves' ability to influence liquidity and cash balances in our currency. It has been a long time since the margin requirements have been adjusted to reflect the risk in the system, either up or down.