From: eliav bock [eliavbock@hotmail.com] Sent: Friday, January 02, 2004 1:20 PM To: rule-comments@sec.gov Subject: file no. S7-23-03 963 Columbus Ave #5b New York, NY 10025 December 29, 2003 Mr Jonathan Katz Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549-0609 Dear Mr. Katz: I am writing to you Re: Regulation SHO under Securities Exchange Act of 1934 to replace SEC Rules 3b-3, 10a-1 and 10a-2. I write this letter as an active trader and investor for the past three years. I believe that the SEC should do away with the bid tick rule in liquid stocks for the following three reasons: #1 The bid tick rule serves little purpose in liquid stocks. The theory behind this rule is that when a stock’s price is dropping, if investors could short below the consolidated best bid, then the stock’s price will decrease even farther. If bad news comes out on a stock, and the price begins to drop, investors should be able to short the stock at any price. By limiting where an investor can short the stock, the SEC is interfering with the best judgment of the market place. #2 In many liquid stocks, there is plenty of liquidity on the bid even when the stock is in a down trend. When stocks use to trade with ¼ and ½ point spreads, it made sense not to allow someone to sell below the best bid. Doing so could make the stock drop an additional ½ point simply because one person wanted to short stock. Yet today, when most spreads are no more than a penny or two, there should be no difference between someone who wants to short two pennies below the consolidated best bid and someone who wants to short two pennies above the consolidated best bid. #3 As a trader, I am already able to short stock below the consolidated best bid on the Island and Archipelago ECN exchanges. As a result, there are two rules that I must take into account when trading on a level two quote. One must follow one rule when trading on NASDAQ and another rule when trading over one of these ECNs. As a result, it is often confusing to know where one is able to short a stock. #4 By allowing small investors to short stock below the consolidated best bid, the SEC will be leveling the playing field between the small investors and the Market Makers. Currently Market Makers are able to short stock at any price, and therefore they have an added over to the small investor. Thank you for taking time to consider this matter, Sincerely, Eliav Bock _________________________________________________________________ Working moms: Find helpful tips here on managing kids, home, work — and yourself. http://special.msn.com/msnbc/workingmom.armx