October 29, 1998

Jonathan Katz, Secretary

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Re: File No. S7-26-98, Books and Records Requirements for Brokers and Dealers

Under the Securities Exchange Act of 1934

Dear Mr. Katz:

This letter is submitted on behalf of Charles Schwab & Co., Inc. ("Schwab") on the SEC’s recent proposal to impose additional books and records requirements on registered broker-dealers. We understand that the Securities Industry Association and the Bond Market Association have jointly requested that the Commission extend the comment period on this proposal for an additional 60 days. Schwab hereby joins in that request. The Commission’s proposal is complex, involves a variety of different possible changes to the Commission’s current rules, and asks for comment on a multiplicity of highly detailed issues relating to each of these changes. We believe the Commission would benefit from reliable data about the costs and burdens of these proposed changes, and it is not possible for us to provide all that data in the time-frame originally suggested by the Commission. Moreover, for an issue of this importance, we believe the Commission would benefit from a more considered response than can be compiled in the APA-mandated minimum comment period of just 30 days.

Finally, we note that the Commission itself has imposed a moratorium on new rules going into effect during much of 1999, if those rules would impose computer system requirements that could conflict with the Year 2000 remediation efforts currently on-going in the securities industry. (Schwab applauds the Commission’s far-sighted recognition that some new regulation may have to be deferred during these essential remediation efforts.) The books and records proposal would, as the Commission recognizes, require significant computer systems modifications. As a result, we believe the Commission should not target any rules it eventually adopts for effectiveness until after the end of the Year 2000 regulatory moratorium. Therefore, there is no urgency which would justify a minimal comment period on the books and records proposal.

We appreciate the Commission’s consideration of the industry’s request for an extension of time, and we look forward to commenting substantively and constructively on the Commission’s proposal.

Sincerely,

W. Hardy Callcott

Vice President & Deputy General Counsel

Charles Schwab & Co., Inc.

cc: Arthur Levitt, Chairman

Dr. Richard Lindsey, Director, Division of Market Regulation