To: Mr. Jonathon G. Katz
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609
Re: File No. S7-23-03
Date: 12 - 23 - 2003

Mr. Katz,

I am taking the time to write you because I have reservations regarding the newly proposed regulations that deal with short selling, in particular, Regulation SHO. I have worked on the floor of the NYSE and I have been a trader at two different hedge funds. Currently, I am employed by Trillium Trading, LLC as a professional trader. I have extensive experience in trading and I strongly believe that this new rule will have an adverse affect on the daily trading of stocks.

Regulation SHO, which requires that short sales be executed one cent above the best bid, definitely limits the liquidity of stocks and the market as a whole. By not allowing short sellers to initiate trades, the share size on the offer will continue to increase, buyers will move down in price and liquidity will dry up. Short sellers will chase the stock down in order to find a level in which they can participate. This scenario will most likely cause large fluctuations in the daily trading of stocks and will make it very difficult for investors to achieve fair prices. The purchaser of the stock will also be negatively affected by this rule because he or she will have to pay the offer in order to get an execution. Paying the spread a majority of the time is quite costly and unfair.

The portion of Regulation SHO, which gives Market Makers an exemption, is outrageous. Giving the Market Makers an exempt status puts all other investors at a disadvantage. Why should anyone who participates in the trading of a security have privileges over anyone else? MM's are usually the ones who determine the direction of stocks and giving them certain rights allows them to further manipulate prices.

This rule was initiated in order to make the trading of stocks fair and reasonable. But when you take a step back and see how this rule negatively affects the markets and its participants, it is clear that Regulation SHO should not be implemented.

Thank you for your time,

Eric M. Trach