Subject: File no. S7-5-99 Author: Gordon Arnold Date: 4/5/99 4:48 PM I am the President and CEO and a 10% shareholder in a small cap company which would be impacted by the implementation of Rule 15c2-11. This rule shifts the burden of regulating and policing microcap stocks from the federal government and the SEC to market makers who trade in the stock. To my knowledge, market makers are not required to regulate and police larger cap companies. This rule is like the slogan "When guns are outlawed, only outlaws will have guns". If legitimate traders are threatened with the litigation which will surely flow from this rule, they will abandon small cap markets in a hurry. The result will be that only unreliable traders will involve themselves with small cap companies. If Rule 15c2-11 is implemented my company and my shareholders, along with those of thousands of others, will suffer the result of bad public policy. I URGE THAT RULE 15 c2-11 MUST NOT BE IMPLEMENTED!! Gordon R. Arnold Sierra Monitor Corporation 1991 Tarob Court Milpitas, CA 95035, USA Phone 408 262-6611, Fax 408 262-9042 Business email: garnold@sierramonitor.com