J. Garry McAllister


1487 E. Thistle Downs Dr.

Sandy, Utah 84092

Email: mcallaw@aol.com

Johnathan G. Katz,

Secretary, Securities and Exchange Commission

450 Fifth Street

N.W., Washington, D.C. 20549-0609.


Re: File No. S7-5-99

Dear Sirs:

Over the past 15 years I have represented nearly one hundred microcap companies. Many of these companies went on to be listed on the NADAQ and NASDAQ NMS Boards. The OTC market facilitates a market place for the shareholders of these smaller entities and provides access to public markets and allows the general public (from all socio-economic levels) the ability to explore and invest in new up and coming businesses. While I realize that it is the Commissions goal to protect the investing public, the proposed rule would severely hurt a large portion of that same public that have invested in these small cap stocks and intend to do so in the future. In discussions with a number of Market Makers, it is clear that the effect of this rule will be to eliminate this market in total.

It is my experience that these small companies have a greater concern for each individual shareholder because each shareholder is simply of greater value to the company than that same individual would be for a "Big Board Company". Edging the small companies out of the marketplace effectively obliterates the potential for fair competition and will close an access to the market for many worthwhile companies.

I have spoken with several market makers this week and ALL have said that they would be dropping all OTC securities if this ruling is put in effect. In other words, this ruling would destroy most if not all of these small companies and cause severe damage to tens of thousands of shareholders.

It seems that a hatchet is being used where a scalpel would be much more appropriate. I understand the Commissions concern regarding public interests and fraud in the microcap market, however, the vast majority of microcap companies are legitimate companies with real concern for their investors. Because the market makers will not be dealing in microcap companies, this ruling will destroy those companies and that is definitely not in the best interest of the public.


J. Garry McAllister