Date:    2/5/98  1:59 PM
     
Jonathan G. Katz
Office of the Secretary
Securities and Exchange Commission 
450 Fifth Street NW
Washington, DC  20549
     
Re: File No. S7-27-97, Delivery of Disclosure Documents to Households
     
Dear Mr. Katz:
     
	Our household welcomes the process improvements described in the proposed 
rule, provided the industry does not use the implied consent provisions
to abrogate its responsibility to the individual investor.  The proposed 
conditions for implied consent do not give reasonable assurance "that every 
security holder in the household either receives or has convenient access
to a copy of the prospectus or report delivered to a member of the 
household."; To protect the rights of the individual investor, householding without 
written consent should not be permitted, whether the investor's account 
is opened after or before the effective date of the rule.
     
	If provisions for implied consent are struck from the proposed rule, 
householding for shareholder reports could logically be subject to the 
same conditions as householding for prospectuses.
     
	Firms with the technology to implement householding have the ability
to maintain a separate address record for the household, tied to the accounts 
of each individual investor in the household.  Investors should be
able to choose one of the multiple account titles or specify their preferred 
listing as the household form of address.  (For example, if a husband 
and wife have a joint account and several individual accounts with a firm, 
they should be able to specify how they want the name field to read, whether 
the joint account registration, "Mr. and Mrs." or some other form of 
address.); At least one firm already uses the concept of a "master account" to link 
other accounts for electronic trading.  A "master household address" is 
much easier to implement.  I do not share the Commission's concern that 
the use of general addressing (such as the "Smith Household") "may reduce the 
likelihood that a prospectus will be opened and read."  However, letting 
the investors choose their household form of address would be 
desirable.  If the investors cannot choose their form of address, what 
criteria will govern?  Will the computer send mail to joint account 
holders (if any), the investor with the most assets held by the firm or 
perhaps the eldest male in the household?  (Investors' choice could 
avoid potential discrimination.)
     
	I hope the Commission will be particularly careful in extending the 
concept of householding to the electronic delivery of information.  It is advisable
to test this concept in several pilot cases before implementing it in a rule.  
There is not a one-to-one mapping of the document delivery process via regular
mail and electronic mail.  (As a simple example, consider the issue of changes
of address and the inability to have one's electronic mail forwarded from
a previous account to a new address with another Internet service provider.)  
For electronic delivery of disclosure documents, all investors in a household
should have to consent to that method in writing unless the electronic delivery
option is in addition to regular postal delivery.  The Interpretive Releases are
completely inadequate in helping to determine whether "legal requirements pertaining 
to delivery of documents have been satisfied" if they rely on the statement
"that persons using electronic delivery of information should obtain informed 
consent from the intended recipient or otherwise have reason to believe
that any electronic means so selected will result in satisfaction of the 
delivery requirements."  The "or otherwise have reason to believe..." 
provision is too broad and does not ensure that an investor even has an 
opportunity to give informed, written consent. Worse yet is the idea that 
"In the case of a passive delivery system such as an Internet web site, the 
proposed rule would permit delivery of a notice of the availability
of the prospectus on the web site to a single investor at the shared 
address."  If the Commission is concerned that investors might consider disclosure 
documents delivered by the postal service as junk mail and discard them, the 
Commission should be even more concerned about the ease with which electronic 
junk mail can be deleted.  The notion of "householding" via an individual's 
electronic mail account is wishful thinking until solid data are available to
prove access is feasible for all investors in a household.
     
	In the problem statement, the Commission mentions that "Sending multiple 
copies of the same document to investors who share the same address often 
inundates households with extra mail, annoys investors, and results in higher 
printing and mailing costs for issuers, underwriters and other broker-dealers.  
In many cases, these costs are ultimately borne by investors."
     
	There is clearly a cost benefit for those firms who will take advantage
of this proposal.  However, it is difficult to anticipate a cost benefit 
for investors.  Have any firms pledged to reduce fund operating expenses 
as the projected savings are realized?  Investors who opt for electronic delivery
could end up with higher costs if they also choose to print the prospectus or 
report (at 2 to 5 cents per page).  If the estimated mailing savings are truly
substantial, the postal service might raise its rates to compensate for lost revenue.
     
	For the investor, householding might reduce the "aggravation" of receiving 
multiple disclosure documents, but does not solve the problem of receiving multiple
unwelcome, unsolicited mailings from the same firms marketing their product/service
offerings.  Have any firms agreed to reduce their extensive mailings of marketing
materials in conjunction with householding?
     
	If the Commission refuses to retract the implied consent provisions
of this proposal, particularly with regard to electronic delivery, please 
consider adding minimum protection to "give reasonable assurance that all 
investors have access to the prospectus," which is the stated "purpose
of the consent and notification requirements."  To ensure a fair chance 
of access, firms who implement householding could send postcards or include 
a note on investors' account statements to announce the availability of
a prospectus update or other disclosure document.  The announcement 
could provide the Internet address or toll-free number for investors to 
call if householding did not deliver.
     
	Thank you for the opportunity to comment.
     
					Sincerely,

					Jo Scott