Subject: File No. S7-3-98
Date:    4/23/98 9:24 AM
     
Jonathan G. Katz
Secretary, Securities and Exchange Commission 
Mail Stop 6-9
450 Fifth Street, N.W.
Washington, D.C. 20549
     
Mr. Katz
     
 Broker support of Over-the-Counter stocks has been declining for years.
Less of 2% of the brokerage firms will trade Pink Sheet stocks. I submit 
that killing the OTC compounds your regulatory problems, it doesn't 
eliminate them.
     
 I've written two article for the "Bull & Bear" that will appear this
Summer. Since they address SEC policy, you might want to read the 
manuscripts before you enact detrimental policies.
     
 SCORBOARD discusses the abuse inherent in the trading of Exempt (504)
Securities on the OTCBB. It opens with the observation that the SEC stopped 
the trading of these offerings on the Net, but refuses to do so when it 
involves NASD brokers. The article explores the results of your policy.
     
 The Good, The Bad, & The Ugly discusses some of your good policies, some
of your bad policies, and some terrible policies. My agrument is that the 
SEC should reflect on what it is doing, before it does it.
     
 Before you kill the OTC, you should spend more time reflecting upon the
alternatives.
     
     
William Cate
Editor
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