Date:    02/15/2000  1:52 PM

Subject: Proposed Margin Changes

I am writing to voice my strong objection to the 
proposed margin regulation changes. I am a very active 
investor and I think that the changes that will affect 
when margin calls will be generated and how they would 
be covered is unnecessarily punitive to active 
traders. Furthermore, it does not reduce risk in any 
way.
     
Under the proposed changes one could trade all day 
without exceeding his buying power. But if that 
investor exceeded his buying power near the end of the 
day by just a few dollars, his margin call would not 
be based on the amount by which he exceeded the buying 
power but instead on the cumulative amount of the 
initiation costs of his transactions. It would be 
possible under this system to generate a multi-million 
dollar margin call for a trader that has less than one 
hundred thousand dollars in his account. This is in 
spite of the fact that his risk was never greater than 
one hundred thousand dollars plus the amount by which 
the buying power was exceeded. In addition that 
investor would have no time to transfer the funds to 
meet the call if it were due the same day. It is just 
not feasible to make the calls due without time to 
make the transactions necessary to produce the funds. 
In addition, the money deposited to cover the call 
need not stay in the account more than one day. Once 
the position that generated the call has been 
liquidated the risk to the account ceases to exist.
     
I could give many other examples that highlight how 
unfair these changes would be but I will not take up 
any more of your time. Please consider my objection to 
these proposed rule changes which are unfair and 
merely serve to punish active investors.
     
Sincerely,
     
Matthew Panza