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U.S. Securities and Exchange Commission

Securities Act of 1933 — Section 4(3)

June 5, 2007

Response of the Office of Chief Counsel
Division of Corporation Finance


J.P. Morgan Securities, Inc.
Incoming letter dated June 5, 2007

Based on the facts presented, the Division will not recommend that the Commission take enforcement action against JPMSI if JPMSI sells JPMorgan common stock without registration under the Securities Act of 1933. Capitalized terms have the same meanings defined in your letter.

This position is limited to JPMSI sales of JPMorgan common stock in connection with facilitating JPMSI's customer trades of S&P 500 Basket transactions. We note in this regard that:

  • JPMSI's transactions in the JPMorgan common stock will occur as part of an integrated set of transactions based on the S&P 500 index and executed through computerized trading facilities that permit a simultaneous entry of multiple orders, such as the NYSE SuperDot for listed securities.
  • Orders to sell all the JPMorgan common stock related to the S&P 500 Basket will be entered simultaneously along with orders to sell all the other component stocks.
  • JPMSI will not solicit customer transactions in the JPMorgan common stock or S&P 500 Baskets.
  • At any point in time the individual percentage representation of stock issued by JPMorgan or an affiliate in an S&P 500 Basket will be 5% or less.

This position is based on the representations made to the Division in your letter. Any different facts or conditions might require the Division to reach a different conclusion. Further, this response only expresses the Division's position on enforcement action and does not purport to express any legal conclusion of the question presented.


Carol M. McGee
Deputy Chief Counsel

Incoming Letter:

The Incoming Letter is in Acrobat format.


Modified: 06/05/2007