From: Falvo, Bruno [Bruno.Falvo@bmo.com] Sent: Tuesday, January 06, 2004 10:43 AM To: rule-comments@sec.gov Subject: File No. S7-21-03 Catherine McGuire, Chief Counsel Lourdes Gonzalez, Assistant Chief Counsel Linda Stamp Sundberg, Attorney Fellow Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549-0609 Dear Colleagues, It is my pleasure to provide the Securities and Exchange Commission (SEC), feedback related to the SEC's proposed rule regarding 'Alternative Net Capital Requirements for Broker-Dealers That Are Part of Consolidated Supervised Entities'. In principal, the BMO Financial Group supports the efforts and intent of the SEC in regards to the proposed rule (File No. S7-21-03). It is the opinion of BMO Financial Group that the margin loan product, used exclusively by broker-dealers, is not appropriately nor specifically addressed by the New Basel Capital Accord. Nonetheless, I am currently leading a project working towards a solution that will endeavour to meet Basel Accord compliance. Further, in our initial review of File No. S7-21-03, we noted that margin loans were not specifically reviewed and are curious as to why that is. We seek the opportunity to further discuss your views and potential approaches to the margin loan product for broker-dealers that are part of consolidated supervised entities. At your earliest convenience, please provide feedback with specific reference to margin loans. Respectfully Submitted, Bruno Falvo Director, Margin Credit BMO Financial Group 1 First Canadian Place Toronto, Ontario M5X1A1 Phone: 416-359-8504 Email: bruno.falvo@bmo.com **************************************************************************** This e-mail and any attachments may contain confidential and privileged information. If you are not the intended recipient, please notify the sender immediately by return e-mail, delete this e-mail and destroy any copies. Any dissemination or use of this information by a person other than the intended recipient is unauthorized and may be illegal. Unless otherwise stated, opinions expressed in this e-mail are those of the author and are not endorsed by the author's employer.