WOLF, BLOCK, SCHORR AND SOLIS-COHEN
Twelfth Floor Packard Building
S.E. Corner 15th & Chestnut Streets
Philadelphia, PA  19102-2678
Phone:  (215) 977-2226 (Direct Dial)


July 9, 1996

Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

RE:Trading Practices Rules Concerning Securities Offerings
File No. S7-11-96
RIN 3235-AF54
Release No. 33-7282, 34-37094, IC-21883, IS-965 (April 11,
1996) the ("Release")

Dear Mr. Katz:

We are writing to comment on certain aspects of the above
identified proposed restructuring and revision of the
trading practices rules.  We recommend that proposed
Regulation M be clarified and revised with respect to
"direct issuance" dividend reinvestment and stock purchase
plans ("DRSPPs"), for which securities will or may be sold
by the issuer.  Our concern is significant because such
plans typically remain in effect continuously over an
extended period of time.  If, in a particular case,  a DRSPP
constitutes an ongoing and continuing "distribution" for
purposes of Regulation M, and the administration of the plan
fails to qualify for an exemption from the Rule 102
prohibition on purchases, an issuer (and possibly its
affiliates) would never be in a position to purchase the
issuer's securities that underlie its plan.

Preliminarily, we note that the covering Release sets forth
certain positions with respect to such DRSPPs that are not
contained in the rules themselves.  In order to make the
rules more clear and user friendly, any substantive policies
or distinctions reflected in the covering Release or
otherwise relating to DRSPPs in this context should be
contained within the rules.  Furthermore, we note that a
number of Staff positions regarding the administration of
such plans are set forth in a letter to the Stock Transfer
Association, Release No. 34-35041 (Dec. 1, 1994), [1994-95]
Fed. Sec. L. Rep. (CCH) 76,940, as modified by letter
regarding dividend reinvestment and stock purchase plans
[1995] Fed. Sec. L. Rep. (CCH)  77,110 (May 12, 1995)
(collectively, the "STA Letter").  The STA Letter addresses
a number of details on the administration of plans in order
to be exempted from Rule 10b-6, and the Commission
apparently intended these positions to remain applicable
under Regulation M.  So that parties affected may find all
of the requirements in one convenient place, the various
matters addressed in the STA Letter, as they may be modified
for purposes of Regulation M, should be embodied within
Regulation M.  Given the number of special issues that
relate to DRSPPs, possibly they should be assembled in a
separate rule to be included as part of Regulation M.

Plan Features

Preliminarily, we note that DRSPPs may contain some or all
of the features set forth below, in addition to the
reinvestment of cash dividends.  Regulation M should be
classified so that issuers under such plans can ascertain
whether, and if so under what circumstances, Regulation M
restricts their purchases of their own shares.
(Parenthetically, we note our view that none of the features
should give rise to a general prohibition on share
purchases.)

1. Plans typically permit the issuer to determine from time
to time whether the shares are to be purchased for the plan
from the issuer or from other sources (e.g., on the open
market or in transactions negotiated with existing security
holders).

2. Some plans permit the purchase of shares at a discount
from the current trading market price (a "Discount").  The
terms of the plan may permit the issuer to determine, with
respect to each investment period, whether there will be any
Discount and, if so, the level of the Discount within a
predetermined range.

3. Voluntary cash investments (i.e., "new" cash not derived
from the issuer's dividends) may be permitted by plan
participants on the dividend payment dates,  and possibly on
other dates as well -- for example, on a monthly cycle, when
dividends are paid only on a quarterly cycle ("Voluntary
Investments").  Typically, Voluntary Investments are limited
to a fixed dollar amount per participant per investment
period, with the normal maximum being in the range of not
more than several thousand dollars ("Permitted Voluntary
Investments").  Plans may also permit Voluntary Investments
up to a higher fixed dollar amount, or with no dollar limit
fixed in the plan, pursuant to waivers that the issuer may
grant to particular participants with respect to particular
investment periods ("Waivers").  Typically, Waivers and the
issuer's right to reject Voluntary Investments apply only to
amounts in excess of the Permitted Voluntary Investments.

Plans that permit issuers to accept or reject Voluntary
Investments in whole or in part typically set forth a
variety of factors that the issuer will consider in acting
on requests to make Voluntary Investments, including such
matters as market conditions, the issuer's need for capital,
the identity of and past investments by the participant and
other matters.  Accordingly, it can reasonably be
anticipated that the level of sales under a plan may
fluctuate widely from period to period if it includes such
features as a Discount that can be varied from time to time
by the issuer and Voluntary Investments that may be accepted
or rejected from time to time by the issuer.

1. Some DRSPPs permit a participant's initial purchase of the
issuer's shares to be made through the plan by persons who
had no prior  shareholding (an "Open Enrollment" feature).
The broadest Open Enrollment features permit purchases by
anyone.  Other Open Enrollment plans may be limited to
persons with a specified relationship to the issuer such as
employees, agents, customers, suppliers, etc.

2. DRSPPs typically reserve to the issuer or its board the
right to amend, modify or terminate the plan at any time and
in any manner.

3. Some DRSPPs call for purchases by the plan administrator
on particular dates with respect to each investment period,
or during a brief period beginning on such date and
proceeding as promptly as practicable thereafter, if market
or regulatory conditions preclude the purchase of all of the
shares on one day.  Other DRSPPs require the administrator
to make share purchases during a specified period, typically
of five to ten trading days.

4. Some investment decisions, for example Voluntary
Investments, must be initiated by the plan participant in
advance of the purchase date.  Even if Voluntary Investments
can be made on a monthly cycle, typically there is at least
a week between a scheduled purchase date and the time when a
participant must initiate the process to make a Voluntary
Investment on the next monthly purchase date.  Accordingly,
under such a plan, normally there would be a "window" of one
week or more during each monthly cycle from the time one
purchase is completed by the administrator until the time
participants must make a commitment for purchasing shares
during the next purchase period.

4. If shares for participants are purchased from the issuer,
the price may be set as the average trading market price
over a trailing period, typically spanning less than three
calendar weeks, preceding the purchase date (the "Pricing
Period").  For some or all Voluntary Investments, plans may
have a further refinement -- to eliminate from the
calculation those trading days when the market price does
not exceed a threshold price that the issuer may fix to be
applicable to the particular purchase date.  In theory, if
the issuer is selling the shares to be purchased through the
plan, it may have a direct interest in the market price of
the shares during the Pricing Period.  However, it does not
have the same interest during the "window" between one
purchase date and the beginning of the Pricing Period for
the next purchase date.

5. Typically the issuer will announce the adoption of a DRSPP
to all shareholders, and will distribute prospectuses if
registration under the Securities Act is required, at the
time the plan is adopted.  The prospectus and a description
of the plan will be distributed to new shareholders on an
individual basis when they first become shareholders of
record.  The existence of the plan may be mentioned from
time to time in annual reports and other descriptions of
shareholder services generally available, but normally there
is no continuing effort to solicit participation in or
otherwise to "market" the plan or the underlying securities
on an active basis.  If marketing efforts are undertaken,
e.g., through print media or direct mail, such efforts are
likely to be intermittent and not on a continuing basis.

6. When securities are registered for issuance under a plan,
the issuer typically registers enough securities to meet the
foreseeable need on a maximum basis over an extended period
of time -- e.g., two years.

Recommendations

We recommend that Regulation M be clarified or modified as
set forth below relating to DRSPPs.  To a significant
extent, we believe that the results advocated below would be
the normal conclusions to be drawn from the present proposal
and the prior interpretations (including the STA Letter).
We believe it would be very desirable, however, to make the
results explicit in Regulation M in order to eliminate any
uncertainty.

1. For other purposes, the Commission has treated DRSPPs as
being offers of securities on a regularly repeating but
intermittent basis rather than continuous offerings.  Even
if a plan does not qualify for an exemption generally under
Regulation M, a plan containing all of the features
described above should not be treated as  a distribution
that is occurring during the "window" periods described in
paragraphs 7 and 8 above in the list of "Plan Features."
Regulation M should be clarified to permit issuers to
purchase their own shares during such window periods, as
long as no purchases are made on a day during a Pricing
Period or on the trading day immediately preceding the
trading day on which a participant has the last opportunity
to make a commitment to make a Voluntary Investment for the
next purchase date.  This suggestion is consistent with part
III B of the STA Letter.

2. No distribution should be deemed to be occurring during
any period when purchases for the plan are being made from
sources other than the issuer, even if the issuer has the
option to be the seller of the securities.  Because the
issuer would not be selling the securities to the plan
participants during such period and would not receive the
proceeds of the plan purchases, it would have no incentive
to make purchases of its own securities in order to drive
the market price up to its own advantage as a
contemporaneous seller of shares to the plan.  (We note that
when securities are registered under the 1933 Act for a
plan, the Staff considers the registration statement to
cover securities purchased by the plan from other sources as
well as from the issuer itself, but this principle applied
in the 1933 Act context serves a different purpose, and is
unnecessary to apply in the Regulation M context.)

3. If a plan constitutes a distribution that fails to qualify
for an exemption from the Regulation M purchase prohibition
because of one or more plan features, the plan should not be
considered to be a distribution if the issuer has used its
discretion and/or its amendment/modification power to
suspend the application of that feature, for a period of at
least five trading days prior to and during the period when
the issuer purchases its securities, without prejudice to
the right of the issuer to reinstate the application of the
relevant feature (s) after it completes its purchase of its
securities.

4. The terms "special selling efforts and selling methods"
should be defined not to include, individually or in
combination, any of the following:

(i)  General announcements of the adoption or significant
modification of a plan and general distributions of
prospectuses and related explanatory literature.  If you
disagree with respect to this item, the distribution period
should be deemed to terminate 30 days after the completion
of the initial announcement of the plan, the initial
distribution of prospectuses and 10 days after the general
announcement of any significant modification of the plan
(other than a modification that simply eliminates a feature
that causes the plan to be a distribution);

(ii)  Distribution of the foregoing materials to new
shareholders on an individual basis when they first become
shareholders;

(iii)  A listing of the plan as a shareholder service
available to beneficial owners of the company's securities
(including persons whose shares are registered in a street
name) as part of a general communication (including an
Internet home page) on shareholder information or in annual
or other regular periodic reports distributed by the issuer;

(iv)  Establishment from time to time of a Discount, or the
setting of threshold prices in connection with Voluntary
Investments, as described in paragraph 8 above in the list
of Plan Features; and

(v)  Actions by the issuer in accepting or rejecting
Voluntary Investments, or granting Waivers.

5. The definition of "distribution" in Rule 101 includes "the
magnitude of the offering" as one of the factors to
consider.  The Release in the text following footnote 71
states:

Thus, the "magnitude" and "special
selling efforts and selling
methods" tests would be applied to
offers and sales under such plan to
determine whether a distribution
exists.  In determining the
magnitude of an offering of plan
shares, an issuer would need to
consider the amount of securities
it distributes through the plan
directly and indirectly . . .
(emphasis added).

It should be made clear that, in making the determination,
it is necessary for the issuer to consider only sales of
securities made by the plan during the three weeks preceding
the date of any intended purchase by the issuer of its own
securities (and possibly also the amount of securities
reasonably anticipated to be sold on the next investment
date).  A longer history of activity under the plan is not
relevant for this purpose.  It should not be necessary to
consider the total amount of securities either sold already
or unsold and still registered for issuance under the plan.
(This suggestion is consistent with the decision to treat
each takedown from a shelf registration statement as a
separate transaction.  See the Release text at Note 41.)  We
note that the level of purchases under a DRSPP may, and
indeed is likely to, fluctuate widely from period to period
for a plan that permits issuers to establish and change
Discounts from time to time and also permits issuers to
reject Voluntary Investments, in whole or in part, during
any purchase period.

6. The definition of an agent independent of the issuer
includes the requirement that "Neither the issuer nor an
affiliate of the issuer exercises any direct or indirect
control or influence over the times when, or prices at
which, the independent agent may purchase the issuer's
securities for the plan . . ."  The Release, in the text at
footnote 71, states the following:

Except with respect to the issuer's ability to change its
determination once every three months regarding the source
of shares to fund a plan, an agent would not be considered
independent if the issuer directs the agent as to the source
of shares, or the timing of purchases of shares (e.g., a
requirement that shares to fund the plan must be purchased
on the plan's investment date).  The issuer, however, may
establish general conditions for the operation of the plan,
including, for example, requirements with respect to the
return of uninvested funds to plan participants, and
requirements that optional cash payments be invested within
35 days of receipt.  (emphasis added)

Almost every DRSPP will set forth in the plan itself a time
or relatively short time period when purchases are to be
made by the plan administrator.  The fixed purchase date may
be (or begin on) the dividend payment date in dividend
payment months, and a fixed day of the calendar month, or
the next succeeding business day, in other months.  The
plans also typically set a formula, usually related to the
market price on a date or during a Pricing Period, at which
shares will be purchased from the issuer.  The Release might
be read to suggest that these plan features could cause the
agent to be non-independent.  We recognize that similar
limitations were contained in the STA Letter at footnote 9.
However, we believe strongly that  provisions in the plan
relating to the timing of purchases on a date or during a
brief period are not in any way inconsistent with the
purpose of the exemption and should not render the exemption
unavailable.  Indeed, we believe that many independent plan
administrators do not want the discretion or responsibility
of timing the market to determine when purchases should be
made.  Furthermore, a provision setting forth the price at
which shares will be purchased from the issuer (typically a
formula based upon the market price) is essential in order
that the plan can function, because the absence of such a
provision would leave a key issue unaddressed (i.e., the
purchase price of shares to be acquired from the issuer).

The rule should make clear that any provisions fixed by the
plan itself regarding the timing or pricing of purchases do
not taint the agent's independence (and for this purpose
provisions should be deemed fixed in the plan
notwithstanding any general reservation by the issuer of the
right to amend or modify the plan).  Similarly, the right of
the issuer to establish a Discount from time to time should
be excluded specifically from being deemed direct or
indirect control over the prices at which the agent may
purchase the securities for the plan.  Furthermore, as the
Release generally assumes, the issuer's right to determine
from time to time whether the shares are purchased from it
or on the open market should not taint the agent's
independence.  The features mentioned in this paragraph and
the preceding paragraph should be treated simply as terms
that establish the structure of the plan, and not for
relevant purposes as interference with the administrator's
independence.

7. The definition of "agent independent of the issuer"
provides that the issuer may change the determination
regarding the source of the shares "once in any three-month
period."  Because dividend payment dates may vary slightly
from one payment to another (occasioned in part by certain
calendar days being non-business days),  two consecutive
"quarterly" purchases may occur at the beginning and the end
of (i.e., within) the same three- month period.  To preserve
the substance of the provision, but to avoid an unintended
result, it should be made clear in Regulation M that at
least 80 days must elapse (rather than a three- month
period) between the two purchase dates, when the issuer
changes the source of the shares to be purchased.

8. The STA Letter states in Section IV A (the final
paragraph) that "predictions . . . may not be included in
any materials" relating to the plan.  This limitation should
not be included in Regulation M with respect to any plan for
which the underlying securities are registered under the
1933 Act.  If retained in any form, the limitation should be
relaxed to make clear that references to a plan as an
available shareholder services may be included in another
document, such as an annual report to shareholders,
containing predictions.  It should also be made clear that
predictions may be included in registration statements
relating to the plan (including documents incorporated by
reference).  It is the current practice for registration
statements relating to DRSPPs to be filed on Form S-3, which
in turn incorporates numerous other 1934 Act filings.  The
registration statement, including the incorporated filings,
may in fact include (and be required to include)
predictions.

General

As will be evident from the foregoing, we believe that there
are a great many special and complex issues related to
DRSPPs which should be addressed in the context of the
trading practice rules.  Regulation M does not address all
of the unique aspects of DRSPPs, even to the extent that
some of the issues have been addressed previously by the STA
Letter.  Additionally, we note that the undersigned has
communicated directly with counsel for the Stock Transfer
Association, Inc., whose comments to you on the trading
practice rules are contained in its letter dated June 14,
1996.   We concur generally with the views expressed in that
letter.  Accordingly, we recommend that the Staff meet with
representatives of the STA as well as other interested
parties to address the specific issues relating to DRSPPs.
The undersigned would be pleased to participate in such a
meeting, if that would be helpful.

Very truly yours,



Carl W. Schneider
For WOLF, BLOCK, SCHORR and SOLIS-COHEN

CWS:paa