Date:    4/6/99  12:51 PM

Subject: File No. S7-8-99

Dear Mr. Katz
     
I am writing in response to the new rules regarding broker/dealers and 
the year 2000 that the SEC has proposed.  We are a small broker/dealer 
and, therefore, have limited systems and facilities to assess and test 
with respect to the Y2K issue.  The summary that we received states that 
any broker/dealer that does not have a written plan to "identify, assess 
and remediate any Year 2000 problems in its mission-critical systems", 
"has not verified its Year 2000  remediation through internal testing" 
or "has not satisfied any applicable Year 2000 testing requirements 
imposed by a self-regulatory organization" will be presumed to have a 
material Year 2000 problem and will be prohibited from operating after 
August 31, 1999.  While the summary also suggests that exceptions may be 
allowed under certain facts or circumstances, there does not appear to 
be a clear indication of the "facts and circumstances" that would allow 
a broker/dealer to continue operations after the target date.
     
While I am sympathetic to and certainly understand the SEC's concern, it 
appears that this would be a opportunity for the SEC to arbitrarily 
eliminate operations.  This causes great concern for an operation as 
small as ours.  Specifically, we would fail all three of those tests. 
Our operation lives to serve one mutual fund and has a limited number of 
transactions.  We have one server and roughly six PCs.  We clear through 
a larger broker/dealer.  While we have a systems consultant, we do not 
have an in-house systems staff.  All of the software we use, most of 
which is for our transfer agent operation, is "off the shelf".  We have 
no custom modifications to our software.  We have one primary office 
which is on the second floor of a three story building.  Consequently, 
we have been able to evaluate our operation in less time than it would 
take to write a Y2K plan.
     
Finally, we were assured in the seminars that we attended for the 
securities industry, that small operations like ours would not be 
required to have a written document, etc.
     
Consequently, I suggest that you carefully consider the ramifications of 
the regulations.  If you must regulate and plan to have exceptions, 
please detail the exceptions that are permissible, consider the cost 
benefit of what is being required, and contemplate the ramifications of 
what you are asking to insure that the requirements are equitable.
     
Sincerely,
     
Paul Henning
Treasurer