Subject: File No. S7-8-99
Author:  "Alex Hanson" <ahanson@bellatlantic.net>
Date:    4/9/99 1:34 PM
     
     
Jonathon Katz, Secretary
SECURITIES AND EXCHANGE COMMISSSION
     
Dear Sir:
     
We appreciate as always the opportunity to comment on proposed regulation. 
     
In the case of the SEC proposed rule entitled "Operational Capability 
Requirements..." referenced above, we believe that your proposal has some major 
flaws that will increase the potential for mayem associated with Y2K, and would 
have exactly the opposite effect that you are trying to create.
     
Most importantly, you seem to have missed the point that any broker dealer would
have to completely shut down upon discovering a Y2K compliance problem that 
impaired (however slightly) a mission critical process at any time after 
10/15/99. Thus, if on 10/16/99, a key broker dealer discovered a material Y2K 
problem it would be required to stop all trading, even though it might be 
confident that it would have the problem fixed in one week, with no operational 
impact on customers or required functions whatsoever.  
     
To read the letter of your proposed rules, the only contingency plan allowed for
the slightest problem with any of these systems is to shut down, and await the 
SEC's mercy in allowing a restart, or be dissolved. Why bother requiring a 
contingency plan at all? Elsewhere in SEC and SRO documents it is readily stated
that there will certainly be unexpected glitches regardless of the testing and 
preparation. Yet this rule implies that even a problem fixable before the real 
Y2K deadline would require a shut-down.
     
This must be urgently addressed. 
     
Finally, we note that it seems a little unfair of the SEC to impose these rules 
with an August 30,1999 deadline with only 5 months notice, when the extent of 
this problem has been well known for years. Advancing the preparation deadline 
by perhaps two months at such a late stage is unfair to firms that have been 
planning and budgeting their remediation cycle for a year.
     
Your sincerely,
     
     
     
     
Alex Hanson
General Securities Principal
ST2 L.P.
ST Partners, L.P.
Sierra Trading Group L.L.C.
3rd Floor, 33 Witherspoon St.
Princeton NJ 08542
609-921-9071