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                          ¦April 6, 1999                ¦                ¦

Mr. Jonathan G. Katz, Secretary

Securities And Exchange Commission

Mail Stop 6-9

450 Fifth Street, N.W.

Washington, D.C. 20549

Re:Proposed Amendments to Rule 15c2-11;

Your File No. S7-5-99

Dear Mr. Katz:

We represent several broker-dealers who, among other things, are market makers in securities traded on the Bulletin Board and in the pink sheets. We write to express and explain our opposition to the proposed amendments to Rule 15c2-11 ("the Rule") and to request that the Commission extend the period for comment for a period of 60 days.

By eliminating the Rule's "piggy-back" provision and thus requiring all broker-dealers to review current issuer information before publishing price quotations, by requiring at least annual updates and review of the issuer information, by imposing upon broker-dealers additional obligations upon the occurrence of specified events, by expanding the information required for non-reporting issuers and by requiring documentation of the broker- dealer's compliance with the Rule, the proposed amendments to the Rule would impose significant additional burdens upon broker-dealers making markets in Bulletin Board and pink sheet securities. The result will be that such broker-dealers will inevitably be required to augment their compliance staffs at significant expense to the broker-dealers. This will dissuade many broker-dealers from making markets in these securities. This, in turn, will have a chilling effect upon the liquidity of these markets and ultimately upon the ability of small companies to raise money.

No such burdens are imposed upon market makers in NASDAQ securities or specialists in securities listed on an Exchange. The Rule thus discriminates unjustifiably against broker-dealers making markets in Bulletin Board and pink sheet securities and appears to be based upon an underlying assumption by the Staff that market makers in Bulletin Board and pink sheet securities must be regulated more rigorously than those brokers who trade NASDAQ and listed securities. Respectfully, we totally disagree with that assumption. The Staff has provided no rationale to support that assumption. We think the reason is clear: There is none.

Even if there were justification for the assumption that market markers in Bulletin Board and pink sheet securities require more rigorous regulation than brokers who trade in NASDAQ and listed securities, the Commission and the NASD have already addressed the issue of "microcap fraud" in several recent regulations. The proposed additional regulations are, we submit, unnecessary and contrary to the public interest for the reasons discussed in this letter.

In addition, although it is clear to us that the Staff does not intend that the proposed amendments to the Rule impose underwriter liability upon market makers in Bulletin Board and pink sheet securities, we and our clients are vitally concerned that the proposed amendments would subject our clients to totally unjustified lawsuits and arbitrations by plaintiffs and claimants who would attempt to use the amendments to the Rule as the basis for imposing underwriter liability. The cost of defending such lawsuits and arbitrations and the potential exposure that the proposed amendments would create will, we believe, result in numerous broker-dealers ceasing to make markets in these securities which, in turn, will be disastrous in terms of the capital raising capabilities of young companies.

Finally, the proposed amendments are an extremely serious matter and a reasonable period of time for comment should be allowed. We and many other interested people only recently became aware of the proposed amendments to the Rule. We are advised that numerous broker-dealers and others will wish to comment upon the proposed amendments, but will be unable to do so by the present April 7, 1999 deadline. The situation is exacerbated by the Easter and Passover Holidays. We, therefore, respectfully request that, in the public interest, the period for comment be extended for 60 days.

If you, the Staff, or the Commission would like any further explanation of our views, please do not hesitate to contact us.

Very truly yours,

RFH:pRichard F. Horowitz