Subject: SR NYSE 99-47

Date:    04/04/2000 6:42 PM
     
     
Ladies and Gentlemen,
     
I have been a Compliance Officer, Manager and Director for many years. I 
would like to support the proposed ammendment to the Margin rule as proposed. 
However, I would like to express the following. 
     
A. The rule, as submitted, does not go far enough. The definition of a "day 
trader" and/or "pattern day trader", is insufficient. While the definition 
does at least help, the reality of "day trading" is not properly addressed, 
and fails to address a serious core problem. Many "day traders" treat the 
markets as if they are in the business of professionally trading. The 
assertion that "day trading" is the same as running a small business is 
patently absurd. 
     
Day trading by individuals is not a profession, nor a business, and should 
never be treated as such. There is no way anyone can dispute the fact that 
most "day traders" lose a large part of their capital in the market(s). Day 
trading is a practice that is both abused and encouraged by the very industry 
sworn to protect individuals from unscrupulous practices. Professionally 
trained traders take advantage of these individuals in the market on a daily 
basis. In example, One manner in which this is accomplished is by taking 
positions of large capital and/or pattern leads (leading a purchase or sale 
of a security) and consistently sitting opposite a smaller position. Momentum 
can never be valued by an individual not aware of the position(s) held 
outside their account. 
     
In addition, firms that encourage such practices take advantage of these 
individuals by charging often exhorbanent clearing fees in addition to other 
fees and charges. Many "day traders" are unaware of the practices utilized by 
the very same industry in which they may, or may not, profess to have an 
abundance of knowledge. This practice should be discouraged by our industry. 
     
B. The minimum requirements do not go far enough. Professional traders, with 
the capital of their firms or large accounts, and consitently take advantage 
of the smaller capitalized "day trader". This practice should be discouraged 
in that Registered Broker Dealers are knowingly taking advantage of this 
wonderful opportunity. The old adage "We'll take your money and our 
experience, and turn it into our money and your experience" is certainly 
applicable. 
     
In addition to already creating margin call, minimum calculations, and sell 
outs a consistent operational and compliance nightmare. Compliance Managers, 
Directors and others, are at a consistent disadvantage when attempting to 
determine the validity of a transaction and remain in compliance with the 
securities act(s) of 1940. "Know your customer" rules and expectations are 
consistently overlooked by firms utilizing electronic mediums. For those 
firms that encourage "in house" "day trading" abuse this system even more 
than the individuals we are sworn to protect realize. 
     
C. Let me remind you of a practice that should always be discouraged, or 
fully documented whenever it occurs, is the practice of buying and selling 
the same security, or one in the same industry on either a daily basis or 
within a reasonable amount of time. Since you rarely accomplish much with 
lesser capitalized transactions than there larger bretheren, the fact that it 
is discouraged for the purpose of creating a larger commission base by a 
broker, should also be applied/discouraged for the firm that clears these 
transactions. There are many unnessecary fees and charges being collected as 
a result of this practice.
     
For the purpose of encouraging a more orderly and functionable market place, 
margin limits should be raised higher, for both "day trading" and minimum 
limits overall, in order to facilitate a more orderly market place. Small 
investors are consistently being taken advantage of. Most of the larger 
financial firms are profiting from these practices as addressed by this 
ammendment, but they fail to properly address the core issue(s). 
     
The day will soon arrive when the small, and often improperly capitalized, 
firm that transacts securities in which they make a market will dissappear. 
The very same practice(s) they displayed all too often when front running, or 
dropping support for a security without the publics knowledge, are often the 
very same practices used by the larger firms in todays markets.
     
More regulation over these practices are required. To ease, and or 
under-restrict these practices, would be a travesty to the general public. 
Please accept this as constructive criticism.
     
Sincerely,
Kevin T. Begley