Pembroke Management Ltd.
1002 Sherbrooke Street West, Suite 1700
Montreal, Quebec, Canada. H3A 3S4

February 14, 2003

Mr. Jonathan G. Katz
United States Securities and Exchange Commission
Mail Stop 6-9
450 Fifth Street, NW
Washington, DC 20549-6009

Re: Proposed Rule Regarding Rule 10b-18 and Purchases of Certain Equity Securities by the Issuer and Others (S7-50-02)

Dear Mr. Katz:

It is our intention to respond to the request for comments from the S.E.C. with respect to amending Rule 10b-18 as it currently appears in the Securities Exchange Act. Pembroke Management Ltd. is an investment management company founded in 1968 and located in Montreal, Canada. The firm manages U.S. and Canadian equity portfolios for Canadian pension funds and mutual funds.

We disagree with the S.E.C.'s proposal to eliminate the block trade exception to the volume condition of Rule 10b-18. We are concerned that the proposed elimination of the block trade exception would severely limit the Rule 10b-18 safe harbor for many small and mid-cap publicly traded companies. We do not believe that the block trade exception results in manipulation or stabilization of issuer stock prices in contravention of the meaning and spirit of Rule 10b-18.

We also believe that eliminating the possibility of block repurchases will act to discourage Pembroke Management Ltd. and other institutional investors from purchasing stocks in these small and mid-cap issuers because it reduces the ability to use an effective exit strategy to dispose of these securities. We would support the S.E.C.'s suggestion to increase the size of what would be considered a "block trade" while retaining the current block trade exception.

In conclusion, Pembroke Management Ltd. believes that the elimination of the block trade exception from the Rule 10b-18 safe harbor would disadvantage investors in small and mid-cap issuers. We believe that the current regulations provide adequate information to the marketplace about the incidence; frequency and impact of repurchase programs on such issuer's publicly traded securities.


Pembroke Management Ltd.