Subject: File No. S7-02-10
From: Gerard M Evans, Mr

February 16, 2010


I am a licensed proprietary trader and would like to add my voice to the movement to outlaw abusive practices that threaten to destroy the trading industry.

In particular, sub-pennying is an eventual zero-sum practice that can result only in the demise of millions of small retail investors anxiously trading their savings and retirement funds.

It will destroy the livelihoods of proprietary traders like myself, who are forbidden to compete on an equal footing with the algorithmic abuses of the large financial organisations.

In effect sub-pennying, as permitted to an elite few
organisations, creates an unequal playing field and allows them to become virtual casinos, such is the edge they possess. This is undeniable and as such is a prima facie reason for its prohibition.

The SEC must investigate and correct the falsehoods propogated by those involved in sub-pennying, namely that they are creating wealth for traders by improving prices. Rather, they are stepping in front of trader's orders - peeking at their cards - before placing their own bets.

If the SEC wants to avoid the prospect of its financial markets populated solely by super-computers then it must act. As traders and individual investors leave the industry, unable to compete, the volume will decline and the ensuing volatility will threaten economic stability. We are in very dangerous territory.

I communicate with hundreds of individual traders and NOT ONE has managed to avoid the pernicious effects of sub-pennying. Not one supports or has anything to say in its defense. Everyone has lost money to this practice and nobody wants it to continue except the big finance houses who prosper from this inexplicable advantage.

I also oppose the financial transaction tax, which will destroy the careers of ALL but a handful of proprietary traders and wreck the financial plans of millions of small mom and pop investors.

It is almost impossible to make a living trading these days - Honda and Ford are the vehicles of choice of the traders I know, not one Ferrari owner among them - and the tax as proposed would put probably 80% of them out of business.

Meanwhile, the large financial institutions the tax is designed to affect will find some way of emerging unscathed. This is a rash measure and needs locking away permanently.

I would conclude by saying that the entire financial industry is under grave threat from the abusive use of technology to undermine a fair and equitable market. A level playing field is the fundamental core of the market.

Regards. G Evans