From: hgbjr [mailto:hgbjr@ix.netcom.com]
Sent: Thursday, April 29, 2004 9:08 AM
To: marketreg@sec.gov
Subject: File No. SR-NASD-2004-044 - Proposed Amendments Relating to Short Sale Delivery Requirements


Ms. Margaret H. McFarland
Deputy Secretary
Division of Market Regulation

Ms. Katherine A. England
Assistant Director
Division of Market Regulation

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
{Via electronic Mail: marketreg@sec.gov}


Dear Ms. McFarland and Ms. England:


    I am an attorney in North Carolina. I am writing to request information as 
to the status of NASD's Proposed Rule Change, submitted to the Securities and 
Exchange Commission as File No. SR-NASD-2004-044 - "Proposed Amendments Relating 
to Short Sale Delivery Requirements" on or about March 9, 2004 (the "Proposed 
Rule").

    Specifically, when might we expect that the Proposed Rule will be published 
in the Federal Register? Does the SEC intend to seek comments on the Proposed 
Rule, or to publish it as filed by the NASD? Are you able to give a time frame 
as to the approval process for the Proposed Rule, i.e., when may the public 
expect that the Proposed Rule will be made effective (not including the 60 day 
notice to NASD members and the 90 day implementation period, each proposed by 
NASD)? 

    Thank you in advance for any information you can provide with respect to the 
Proposed Rule. Given current market conditions in the small- and microcap 
markets, the Proposed Rule is very timely and a brilliant solution to the many 
problems that arise from prolonged settlement failures, especially the facts 
that (i) responsibility for timely settlement is placed at the clearing firm 
level, and (ii) that market makers can only get extensions for naked short sales 
to fulfill customer orders, as opposed to naked short sales made as a trading 
strategy (which is of course not "bona fide market making" anyway).  My one 
concern with the Proposed Rule is that some NASD member firms will continue to 
disguise short sales as "long" sales and attempt to evade the time requirements 
of the Proposed Rule thereby. But over all, the Proposed Rule should result in 
fewer purposeful settlement failures and less resulting market manipulation, 
again especially manipulation by the market makers themselves. 

    Very Truly Yours,

    H. Glenn Bagwell, Jr., Esq.