March 10, 1999

Mr. Jonathan Katz


Securities and Exchange Commission

Mail Stop 6-9

450 Fifth Street, N.W.

Washington, DC 20549

RE: File No. SR-GSCC-99-01: Notice of Filing of Proposed Rule Change Regarding the Expansion of GSCC’s GCF Repo Service

Dear Mr. Katz:

The Bond Market Association (the "Association")1 welcomes the opportunity to comment on the above-referenced proposed rule change filing by the Government Securities Clearing Corporation ("GSCC"). Although the Association takes no position with respect to the specific merits or benefits of the GCF Repo product which is the subject of the rule filing, the Association notes that this rule filing is consistent with our long held position that competitive market forces should be allowed to determine market structure and participant behavior without undue government involvement. Moreover, given our understanding that one key effect of this rule filing would be to broaden access to the

existing GCF Repo service, we believe that it is consistent with the requirements of Section 17A of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder. Accordingly, the Association supports Commission approval of the proposed rule change without amendment.

The Association strongly believes that market forces should be generally relied upon to produce the most efficient allocation of resources. The Association recognizes this rule change--which would expand GSCC’s GCF Repo service to allow participating dealers to engage in GCF Repo trading with participating dealers that use different clearing banks--as the type of initiative and innovation from individual market participants that is so crucial to the smooth and efficient functioning of the debt markets. Further, by expanding the GCF Repo service, the proposed rule change would provide a wide array of market

participants with increased flexibility in satisfying their funding needs as well as the funding needs of their customers.

In conclusion, as stated above, the Association urges the Securities and Exchange Commission to take prompt action in approving the above-referenced GSCC proposed rule change.

Again, the Association appreciates the opportunity to offer its views on this rule change. Should you have any questions concerning the letter, please do not hesitate to contact me at 212.440.9436.




Scott C. Rankin

Assistant General Counsel


cc: Members of the Funding Division Executive Committee

Paul G. Scheufele, Credit Suisse First Boston (Chairman, Funding Division

Executive Committee, The Bond Market Association)

Brian E. Reilly, Paribas Corporation (Vice Chairman, Funding Division

Executive Committee, The Bond Market Association)

Scott Kimmel, Lehman Brothers Inc. (Chairman, Funding Division Legal

Advisory Committee, The Bond Market Association)

Ranada R. Fergerson, Bear, Stearns & Co. Inc. (Vice Chair, Funding

Division Legal Advisory Committee, The Bond Market Association)

Jeffrey F. Ingber, Managing Director, General Counsel & Secretary, The

Government Securities Clearing Corporation

Paul Saltzman, Senior Vice President & General Counsel, The Bond Market


1 The Bond Market Association represents securities firms and banks that underwrite, distribute and trade fixed income securities domestically and internationally. Our members are actively involved in the funding markets for such securities, including the securities lending and repurchase agreement markets. Further information concerning the Association may be obtained from our website at (