120 Broadway · New York, NY 10271-0080 · (212) 608-1500 · Fax (212) 608-1604

May 12, 1999

Mr. Jonathan G. Katz, Secretary

U.S. Securities and Exchange Commission

Mail Stop 6-9

450 Fifth Street, N.W.

Washington, DC 20549-6009

Dear Mr. Katz:

The Federal Regulation and Capital Markets Committees (the "Committees") of the Securities Industry Association ("SIA") are pleased to submit this response to Release Nos. 33-7607 and 34-40633 (the "M&A Release") on behalf of the SIA. We also necessarily discuss certain aspects of a companion release (Release Nos. 33-7606A and 34-40632A (File No. S7-19-96) (the "Securities Act Reform Release" and, together with the M&A Release, the "Releases")), in which the Securities and Exchange Commission (the "Commission") proposes certain changes to the regulatory structure for offerings under the Securities Act of 1933 (the "1933 Act"). References to the "M&A Proposals" in this letter are intended to include the proposed rules relating to mergers, takeovers and similar transactions ("M&A Transactions") in both Releases, and references to the "Securities Act Reform Proposals" are intended to include the remaining proposed rules in the Securities Act Reform Release.

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We strongly support the policy goals of the M&A Proposals, including increased communications with respect to M&A Transactions, reduction of regulatory incentives to choose one form of economic transaction over another, and streamlining and integration of disclosure requirements with respect to M&A Transactions. We believe that, in most respects, the M&A Proposals implement the Commission’s policy objectives both in "big picture" matters and in technical improvements to the applicable rules and their implementation.

We commend the Commission and the Commission staff for a reform initiative that we believe accomplishes the Commission’s goal of "updating the regulations in order to reduce unnecessary regulatory burdens on participants, while maintaining investor protection and improving the quality of information that investors receive about business combinations." As discussed more fully below, we believe that the Commission’s implementation of its policy objectives in the particular proposals is generally on target, including proposed changes to registration requirements, proxy rules and tender offer regulations that will allow companies involved in M&A Transactions to communicate on a more effective and timely basis with all their constituencies and will reduce the disparities in the requirements for and timing of cash tender offers and exchange offers. In the M&A Proposals, the Commission has responded in a highly constructive manner to the suggestions previously made by investors, issuers and other market participants regarding the need for such changes.

There follows comment on specific aspects of several of the M&A Proposals, where we believe the proposals should be refined and, in one or two cases, significantly changed. We have also addressed certain questions posed by the Commission regarding the M&A Proposals and provided our views regarding certain alternatives on which the Commission has asked for input.

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The Commission proposes revisions under all three principal regulatory schemes that may apply to a business combination or takeover transaction — the Securities Act registration regime, the proxy rules and the tender offer rules — in order to allow companies involved in an M&A Transaction to communicate more freely with all their constituencies, including their securityholders and the trading markets. We support the Commission’s policy of encouraging free communications by the parties to an M&A Transaction. We agree with the Commission that companies should not be foreclosed by the federal securities laws from communicating with all interested constituencies, and that investors and the trading markets will be adequately protected by the Commission’s mandated disclosure requirements and by the liabilities that would attach for misleading disclosures. As the Commission has recognized, the parties to an M&A Transaction have a strong interest in communicating the information that investors and other constituencies want and need to receive in order to understand and evaluate the proposed transaction. In addition, as the Commission appreciates, parties are eager to use their websites and the other electronic tools now available to aid in rapid and cost-effective dissemination of such communications. Because of this, we believe that the proposed safe harbors, by making timely written communications easier and more routine, will naturally encourage broader dissemination of information to investors.

We applaud the Commission’s recognition that an M&A Transaction is not just a transaction, but is itself "news" that the parties wish to and should be permitted to disclose, as they would other material developments. Such news is of interest not only to investors, but also to other affected constituencies, such as employees, customers, suppliers and competitors. M&A Transactions also differ from capital-raising transactions in another fundamental way: a decision to purchase securities in an offering at a particular price occurs at a time that is defined by the rules and customs applicable to the particular type of offering; in contrast, securityholders of the parties to an M&A Transaction are affected well before the deadline for their vote or their decision whether to tender securities. Announcement of a proposed transaction will have an immediate effect on the value of their holdings in the participants’ securities. The market price of such securities will reflect the market’s judgment concerning the benefits and detriments of the proposed transaction. Accordingly, availability of information is of critical importance. As the Commission has noted, "restricting communications to one document may in fact serve to impede, rather than promote, informed investing and voting decisions."

We believe that, overall, the Commission’s proposal represents a good balancing of the protections necessary to assure that sufficient information is provided for affected investors who participate in such transactions, as well as for those who choose to sell or purchase securities of the target or the acquiror in the market after the announcement of a transaction. We would caution the Commission, however, that the communications safe harbors need to be implemented in a manner that does not "chill" communications, written or oral, with the result that investors get less, rather than more, information. Our specific suggestions discussed below are intended to help ensure that the safe harbors for communications have their intended effect.

Applicability. We agree with the Commission that the same rules should be applicable to all M&A Transactions that are subject to the Securities Act, without regard to the size or ADTV of the parties, and that no content restrictions should be specified in the rules. The ongoing need for prompt, accurate information regarding a transaction is independent of the size of the parties or the liquidity of their securities. In addition, the rules should not provide an advantage to one potential acquiror against another in a contested situation as a result of the rules giving it a greater ability to communicate than its competitor.

Free Writing Filing Requirement. While we recognize that the proposal to require the filing of written communications about M&A Transactions builds on staff practice developed in response to current M&A Transaction announcement practices, the proposal goes far beyond current practice by requiring the filing of all written communications issued to investors during the pendency of the transaction, whether or not they discuss the transaction. The only exception is for communications of factual business information — an exception of limited utility given the requirement that such communications contain no forward looking information. The result is to impose both a filing requirement and prospectus liability on all written communications issued by the parties during the pendency of the transaction, except where the communications can be squeezed into the exception for factual business information. We believe that the free writings that the Commission requires to be filed in M&A Transactions should be limited to communications concerning the transaction. In addition, we question whether it is necessary to require a filing of each and every written communication. We suggest that the Commission consider tailoring the proposed rule to require the filing with the Commission of only those written communications about the transaction that contain information not previously filed. This would ease the filing burden without a reduction in the intended effect of the rule. Otherwise, companies will have to file multiple versions of the same material that might differ only in format, style or means of transmission, for example. In the case of differences in format or graphics, filing such document by EDGAR may not necessarily even capture such differences.

The Commission requested comment on whether a notice filing should be required for oral communications. The Commission and the markets have extensive experience dealing with oral communications, without any such requirements for notice. We believe that such a requirement (or any filing requirement in connection with oral communications) would be of limited utility to investors and would create unnecessary administrative burdens and costs for parties to M&A Transactions.

Alternative Securities Act Safe Harbors. The Commission requested comment with respect to two alternatives to the safe harbor as proposed: (a) a limited period for disclosure, similar to the practice that exists now in response to the tension between "gun jumping" concerns and the need to disclose material developments, and (b) a requirement for a specified "quiet period."

We believe, for the reasons noted above and those set forth in the Releases supporting the proposed communications safe harbors, that parties should be permitted to update the market on a continuous basis with respect to developments during the pendency of an announced M&A Transaction. Investors would not be well served by artificial constraints on the ability of the parties to address developments and to answer constituents’ concerns and questions on an ongoing basis. Moreover, a quiet period (whether begun after a specific period of communication permitted under a rule or to cure a breach of a rule) could have the decidedly bad result of delaying issuance of the mandated disclosures in the registration statement or proxy statement.

Availability to Persons Other than the Principals. As proposed, the Securities Act safe harbor for offering period communications applies, by its terms, only to offerors. The M&A Release suggests that target companies, when viewed as joining the acquiring company in making the offer, could avail themselves of the safe harbor. The M&A Release requests comment on whether affiliates, dealer-managers and others acting on behalf of the parties should be permitted to take advantage of the safe harbor.

We agree that it is the parties to the transaction that need the safe harbor for written communications. In the case of oral communications, while the principal need for free communications lies with the parties, advisors are likely to participate in discussions about the transaction on behalf of a party. Accordingly, we believe that it would be helpful to make clear that those acting on behalf of the issuer or target, such as its advisors, would not violate Section 5 if they, on behalf of the issuer, participated in discussions or answered questions on behalf of the issuer or the target. Expanding the safe harbor for oral communications to include advisors is appropriate both to allow the advisors to be available to help address questions asked of the participants and, in the case of investment banking firms, to make clear that the firms are not precluded from answering questions about the transaction asked by their own investor clients.

We think that there is no need, given current market practice, to extend the safe harbor to written communications other than those made by the parties to the M&A Transaction. In these transactions, written communications about the transaction are the province of the parties to the transaction. The increase in the time available in which to communicate does not change the relationship between the parties and their advisors: i.e., the parties control the disclosure regarding the transaction, and advisors provide professional and, in some cases, logistical support. The parties, in meeting their filing requirements with respect to written communications, will find that compliance with such requirements will be facilitated by having to address only their own written communications.

3. Free Communications Under the Tender Offer Rules

We support the elimination of the "five business day rule." We agree with the Commission that the same policies that support the safe harbor for communications in stock transactions apply equally in the context of cash tender offers.

We also believe that the "five business day rule" provides little, if any, protection to investors against a person whose intent it is to put a company "in play" or manipulate trading. The rule applies only to cash tender offers; accordingly, it does not stop announcements of intentions to acquire a company by other means or by unspecified means. Since the means to be used to make an acquisition will often depend upon the defensive strategies of the target, a hostile bidder usually just discloses its general intent and may not be in a position to specify the precise form the transaction will take (or may choose not to do so). Thus, the rule is unable to serve its purpose of regulating the period between announcement and commencement except in the case of friendly transactions, where it burdens those least likely to have a manipulative purpose. We see no reason why, in a friendly transaction, the contracting parties should not be able to determine the timing that is appropriate for commencing the offer.

We support the proposed extension of the availability of Rule 14a-12 to all proxy solicitations. Currently, the ability to engage in soliciting communications prior to the filing and delivery of a proxy statement is limited to solicitations in opposition to an earlier solicitation, invitation for tenders or certain other publicized activity. The reasons supporting freer communications regarding M&A Transactions have been discussed above. Likewise, the other matters on which securityholders may be asked to vote would also benefit from freer communications. The proposed expansion of the Rule 14a-12 safe harbor to all solicitations would accomplish this in an effective manner.

The Commission has requested comment regarding whether there are certain circumstances in which the requirement to deliver a proxy statement as soon as practicable would be too burdensome or in which management or other parties may want to communicate, but that should not trigger the obligation to deliver a proxy statement at the earliest practicable date. Inflexible application of the "as soon as practicable" standard would indeed impede the freer communications contemplated by an expanded Rule 14a-12. However, we believe that such benefits can be achieved if the adopting release makes clear that the condition that a written proxy statement be delivered to all solicited securityholders "as soon as practicable" will be flexibly applied based on the expected timing between the communication and the meeting or solicitation of actual proxy authority. Thus, if a communication occurs far in advance of a stockholder meeting or consent solicitation, the obligation to prepare and distribute the written proxy statement "as soon as practicable" would take into account the fact that dissemination of a proxy statement before a meeting is called or a specific proposal is placed on the meeting agenda would not be informative to securityholders and, indeed, may cause inordinate confusion. In essence, this would codify current practices under Rule 14a-12. Furthermore, in certain cases, events that occur between an initial communication and the meeting may moot the reason the solicitation was made or may result in a different solicitation replacing the original one. The adopting release should make clear that failure to provide a written proxy statement when the purpose of the original Rule 14a-12 solicitation has been mooted would not be a violation of the rule.

The safe harbors for research would continue to operate independently of the safe harbors for communications made on behalf of the participant to the business combination, proxy solicitation or tender offer. Research is an activity separate from the offering, solicitation or tender offer and is not issued on behalf of the parties to the transaction, but rather is issued to advise the investment banking firm’s investor clients. In this regard, we believe that consistent with its efforts to rationalize and coordinate the Securities Act, proxy and tender offer regulatory schemes, the Commission should make clear that its research safe harbors under the Securities Act apply equally and fully as safe harbors under the proxy and tender offer rules. Thus, the current interpretative extension of Rules 138 and 139 to Rule 144A and Regulation S offerings announced in conjunction with the Securities Act Reform Proposals should apply equally for purposes of the proxy rules and the tender offer rules. Likewise, we do not see a need to preclude reliance on the Rules 138 and 139 research safe harbors for proxy solicitations or exchange offers involving public securities offerings exempt from registration, such as Section 3(a)(9) or 3(a)(10), or in connection with a spin-off. As proposed, the codification of the Merrill Lynch letter would not extend the safe harbor for research to these public transactions because they are not required to be registered. This distinction does not seem to be supported by any particular policy reasons or to be otherwise required for the protection of investors.

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We concur with the Commission’s policy to reduce the current regulatory burden on exchange offers arising out of the requirement that the offer not commence prior to effectiveness of the registration statement. The Commission proposes to allow exchange offers to commence, and tenders to be received, prior to effectiveness at the option of the bidder, provided that the registration statement is effective by the end of the exchange offer. We support this proposal. However, as the Commission recognizes, participants’ uncertainty over the length of staff review is likely to defeat the Commission’s goal of reducing the significant timing disadvantage for exchange offers. To make the proposal effective to any significant degree, we believe that the Commission would have to adopt an explicit policy to provide staff comments to bidders within a specified time period — i.e., soon enough to allow for any requisite amendment to be filed and disseminated without delaying the scheduled expiration of the bid.

To give further credence to such commitment, the Commission should consider making the exchange offer registration statement automatically effective on filing if the offeror so requests, and to review the filing as a definitive document, just as it does with a cash tender offer. Allowing automatic effectiveness would not speed up the expected timing of an exchange offer, but would provide greater certainty that such expected timing would be achieved. We do not expect that every offeror would choose automatic effectiveness. The choice would depend on factors that include the expected timing for the satisfaction of various conditions to consummation, including regulatory approvals and whether there is or is likely to be a competing offer. While it is perhaps somewhat more likely that Commission staff comments would result in a supplement being distributed in the case of an exchange offer than it is in the case of a cash tender offer, that would be a risk that the bidder could evaluate when it chooses to request automatic effectiveness.

The Commission has requested input regarding whether expedited review should be available when a cash tender offer is competing with an exchange offer. Certainly, the true test of whether this proposal succeeds in placing exchange offers and tender offers on an equal regulatory basis will come when a cash offer is competing with an exchange offer; however, that can occur at any time after one or the other has begun. An offeror will want to know the timetable it can expect for its offer at the time it makes the decision as to the form that the offer will take. Thus, the applicable rules should not attempt to try to distinguish the pace of staff review based on whether there are competing offers. Rather, the best way to level the playing field between tender offers and exchange offers is to make their timetable identical, ex ante.

The Commission has asked whether automatic effectiveness, if allowed, should be limited to bidders entitled to use Form B (the requirements for which are set forth in the Securities Act Reform Proposals). We believe that such a limitation is not necessary and could be disruptive in the context of a contested offer, where one of the bidders is entitled to use Form B and the other is not. An exchange offer cannot close for 20 business days, which will provide the Commission with the opportunity to review the registration statement prior to any transaction being effected thereunder.

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We believe that confidential review of proxy statements should continue to be available for M&A Transactions, to the same extent that it is now. The fact that the M&A Proposals will allow more information to be communicated to investors outside of the proxy statement should not lead to a less effective process for producing the primary disclosure document that will be delivered in connection with the transaction. It is our experience that the interaction, through the confidential filing process, between the parties and their advisors with the Commission staff has been useful in producing proxy statements for M&A Transactions that contain the disclosures (including the explanations of the rationale for, results of and potential benefits and risks arising out of the transaction) the staff believes to be necessary for the shareholders’ understanding of the transaction and what is being asked of them.

We also believe that, with respect to the types of information that currently are not likely to be disseminated prior to the filing of the definitive disclosure document (in particular, full pro forma financial information — the completion of which is often what determines the date of the initial filing of a preliminary proxy statement), investors will be better served by receiving such information after it has been reviewed by the Commission staff and is no longer subject to change. Experience has shown that the Commission staff often has substantial comments that can result in significant revisions, particularly in the accounting area. We believe that investors should receive the pro forma financial information after such comments have been resolved. This is in accord with the current expectations of investors. We believe that the high likelihood of investor confusion resulting from the disclosure of two (or more) different versions of pro forma financial information in connection with the proxy solicitation strongly argues for maintaining the status quo in this area. No one would be well served by publication of inconsistent versions of such information during the period in which the staff’s comments are being given and addressed.

If the Commission no longer permits confidential filings of preliminary proxy materials, we would suggest that a procedure be implemented that would allow parties to seek a confidential pre-filing review, on an expedited basis, of pro forma financial statements and other accounting matters in order to avoid the problems noted above.

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We believe that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 should apply to forward-looking statements made in connection with a tender offer. This would be consistent with the Commission’s stated policy of harmonizing disclosure practices with respect to the various types of M&A Transactions.

We do not see any reason to discourage the making of forward-looking statements that would fit within the safe harbor in the context of tender offers, whether friendly or hostile. We believe that the opportunity for parties to a merger transaction to choose to disclose forward-looking statements has been useful to investors, and so has the related disclosure of "cautionary" language. Accordingly, we recommend that the existing distinction between mergers and tender offers with respect to the safe harbor be eliminated. As noted by the Commission, the safe harbor does not remove all means of policing forward-looking statements.

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The Commission proposes to recodify Rule 10b-13 (which prohibits purchases during a tender offer that are outside the offer) as Rule 14e-5 and to update its provisions in certain respects.

The Commission proposes to codify an existing exemption (Reuters Holdings PLC (August 17, 1993)) to except unsolicited purchases by a dealer-manager that are made on an agency basis, in order to allow a dealer-manager to conduct its customary brokerage activities. We support that codification.

In addition, the Commission has sought comment regarding the circumstances in which it would be appropriate not to apply Rule 14e-5’s purchase limitations on a dealer-manager and other advisors. In particular, the Commission has asked whether an exception should be included that would permit riskless principal transactions by dealer-managers. We believe that such an exception would be appropriate. Furthermore, we believe it would be appropriate to provide exemptions from Rule 14e-5 for a dealer-manager and other advisors to engage in:

(a) transactions in stock "baskets" based on standardized indexes and other proprietary "baskets";

(b) consummation of agreements to purchase securities subject to a tender offer that were entered into prior to the public announcement of the tender offer for a price not in excess of the tender offer price;

(c) purchases of the securities that are subject to the tender offer (or options exercisable for or securities convertible into such securities) to cover a "short" position or option position entered into prior to the public announcement of the tender offer, which purchases will not result in an increase in the number of shares to be tendered by the dealer-manager or other advisor; and

(d) purchases of securities by an affiliate of the financial advisor or dealer-manager, which affiliate qualifies for the exception from paragraph 3 of the definition of "affiliated purchaser" in Rule 100 of Regulation M.

We believe that the above exemptions would enable dealer-managers and other advisors to continue to act in their usual capacities in the securities markets and would not provide opportunities to act on behalf of the tender offeror in a manner inconsistent with the policy goal of Rule 14e-5.

The Commission also asked whether an exemption should be included in Rule 14e-5 that would function like the one contained in the City Code to allow a dealer-manager or one of its affiliates to continue to act as a market maker with respect to a security subject to a tender offer. Market makers perform an important role in providing liquidity to the marketplace and facilitating transactions. We support an exception that would allow ordinary market making functions to continue and believe that such an exception is consistent with the Commission’s views regarding market making activities in other contexts and could be implemented in a manner that does not conflict with the protections that Rule 14e-5 is intended to provide. However, rather than looking at the English system, which could be read to use a standard that depends on the intent of the market maker, we believe that any such exemption should be based on objective criteria that directly relate to the policy behind Rule 14e-5 — i.e., that the market making activity not be used to allow the bidder to accumulate shares outside the tender offer using the market maker as a conduit. To be useful and allow bona fide market making activity to continue without undue disruption, we believe that the exception should not include restrictions on the terms of the trades made or the level of any purchases or the size of any position that the market maker holds during the pendency of the tender offer. Instead, the Commission could consider a limitation on the number of shares that a market maker is permitted to tender into the offer. Such a limit would provide the necessary safeguard against a market maker being used as a conduit by the offeror to accumulate shares. The limit should be based on objective criteria that could include, for example, the average long position of the market maker during the two full calendar months immediately preceding, or any consecutive 60 calendar days ending within the 10 calendar days preceding, the announcement of the offer.

We also believe that Rule 14e-5 should not apply to purchases during any "subsequent offering period," so long as such purchases are made at a price that does not exceed the offering price. During the subsequent offering period, there are no remaining conditions to the offer. The offer is held open to allow those who did not tender prior to the conditions being satisfied to tender after the offer is no longer conditional. If the offer had expired, purchases could be made by the bidder. The fact that the offer is being held open should not preclude such purchases. It is unclear why the Commission believes purchases outside the offer during the subsequent offering period would raise the same concerns as those during the tender period (when the bid is conditional).

We would like the opportunity to discuss in greater detail with the Commission staff the exemptions described above and the approach proposed with respect to an exemption for market making activities.

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We fully support the introduction of the concept of a "subsequent offering period" into the U.S. tender offer regime in order to provide investors with the opportunity to decide to participate in an offer once it is clear that the tender offer will be successfully completed (rather than being forced to wait for a subsequent back-end merger). Properly implemented, a subsequent offering period can expedite (a) payment to tendering stockholders (who otherwise would have to wait while an offer is extended in an attempt to acquire sufficient shares to do a short form back-end merger under applicable state law) and (b) completion of business combinations, lowering costs for participants. Accordingly, we support the Commission’s proposal to require prompt payment, on a "rolling" basis, for shares tendered during the subsequent offering period.

We are concerned, however, that the Commission’s proposal to require a bidder to commit to providing a subsequent offering period prior to the end of the offer may prove disruptive to the efficiency of the tender offer process and, as a result, subsequent offering periods may, to a large extent, not be used. With an assured subsequent offering period, investors desiring to participate in the offering may delay tendering until after the scheduled close of the initial offering period, treating the close of the subsequent offering period as the end of the tender offer period. Consequences could include minimum tender or financing conditions not being met in the initial period; this, in turn, would mean that the subsequent offering period might not happen. Hostile bidders or bidders concerned about possible competition would be unlikely to run such risks, and thus not provide investors with opportunities to tender after the bid is successfully completed. These situations are the ones in which investors would be most helped by having a subsequent offering period.

We suggest that the Commission allow bidders to reserve the right, at the conclusion of the tender offer (after the bidder determines the outcome of the bid), to announce the extension of the offer to provide a subsequent offering period. The Commission could require that, in connection with the initial reservation of the right to provide the subsequent offering period, the bidder disclose how it will disseminate the announcement of a subsequent offering period.

While we recognize that the Commission may wish to specify a minimum period for the subsequent offering period, e.g., three business days, in order to provide an adequate opportunity for investors to participate, we do not think it necessary for investor protection to require one specific period for all offerings. In particular, we see no reason to specify a maximum period since the proposed rule requires prompt payment for each tender made during the subsequent offering period.

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We believe that the Commission should not require a specified minimum solicitation period for proxy solicitations.

In the case of a solicitation by the issuer, who generally controls the timing of a meeting, such a requirement may be feasible, but does not seem to be necessary. While applicable state law varies, we do not think that a need has been demonstrated that justifies preempting state corporate law to federally regulate the solicitation period. It is not clear to us that companies are currently depriving their shareholders of an adequate opportunity to vote. Companies have a real interest in soliciting proxies over a reasonable time period, based on the existing stockholder profile and the means of distributing materials, in order to assure a quorum and the votes necessary to pass proposed resolutions. In the case of a solicitation by a person other than the issuer (i.e., a person who does not control the timing of the meeting), such a requirement could be difficult to meet, especially in a contested situation.

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The M&A Release states that it is the Commission’s intention that both the M&A Proposals and the Securities Act Reform Proposals would "move towards adoption on the same track," but notes that either may be adopted without the other. We do not think that it is necessary to delay adopting the M&A Proposals until the Securities Act Reform Proposals are adopted. We fully expect that the feedback to the Commission on the M&A Proposals will be quite positive and that the Commission will be able to address any revisions suggested in the comment letters relatively quickly. As we indicated at the beginning of this letter, we believe that the adoption of the M&A Proposals would provide significant benefits to investors, issuers and other market participants. Accordingly, we urge the Commission to proceed rapidly with respect to the adoption of the M&A Proposals, whether or not the Securities Act Reform Proposals proceed on a similar track.

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The Committees greatly appreciate this opportunity to present our views. Should you have any questions, please feel free to communicate with Bradley J. Gans at (212) 816-0661. Also, we would be happy to arrange a meeting between representatives of the Commission and members of the Committees to discuss our views more thoroughly if that would assist the Commission.

Very truly yours,

Lee B. Spencer, Jr., Chairman

SIA Federal Regulation Committee

Patricia Maher, Chairman

SIA Capital Markets Committee

cc: The Honorable Arthur Levitt, Chairman

The Honorable Norman S. Johnson, Commissioner

The Honorable Isaac C. Hunt, Jr., Commissioner

The Honorable Paul R. Carey, Commissioner

The Honorable Laura S. Unger, Commissioner

Brian J. Lane, Director, Division of Corporation Finance

Harvey J. Goldschmid, General Counsel, Office of General Counsel

Richard H. Walker, Director, Division of Enforcement

Annette L. Nazareth, Director, Division of Market Regulation

Paul F. Roye, Director, Division of Investment Management