Subject: File No. 4-500
From: R.G. Petersen

May 28, 2005

From what I am seeing Regulation SHO is not working. I have been in communication with (Ellen), Congresswoman Tauscher about this regulation that seems to have too many holes in it to do what it was intended to do.

There was a rule in it (Rule 201) that was taken out of SHO, that wuld have put a "tick" test rule that would have restricted short sales to a price above the consolidated best bid, that might have cleared up someof the mis-interpretation that brokers and Market Makers are convienently allowing themselves to make.

I would like to take this a bit further by only allowing short selling at the "ask" and not at the "Bid" price, as well as limiting the number of shares of any individual stock may be "Shorted" on any given day by a single Broker, Market Maker, AND Clearinghouse, to not more than 1% of the outstanding shares of the security in question.

Also, Rule 203, has an exemption for Market Makers. this is rediculous. There should be a strick set of rules that are "Black and White" for all traders. Exemptions or special allowances only create a path for the resourceful to get around regulations.

Thanks: R.G. Petersen