From: John Thomas [JTThomas5@att.net]
Sent: Wednesday, February 12, 2003 12:42 AM
To: rule-comments@sec.gov
Subject: SR-BSE-2002-15

Dear SEC, and to whom it may concern.

    From the reading of filing SR-BSE-2002-15, a consortium of exchanges 
are interested in forming an all electronic exchange with most beneficial 
rules for the basis of "internalizing option order flow".

    At what point does the SEC truly understand, then realize the conflict 
of interest and breaking down of fiduciary responsibility when investments 
i.e option orders, are not properly exposed to an open marketplace so that 
they may be "internalized". When in the timeline will the SEC understand 
that the investing public, trading firms, and brokerages who provide the 
necessary capital and liquidity for markets to exist decide, because of 
internalization, to allocate their capital elsewhere.

     What we are currently experiencing now is this phenomenon. At this 
juncture in time we are seeing a fleeing of capital and loss in confidence 
in our capital markets for the exact reasons given above. Will we have to 
wait until it is too late for our regulatory body to act (see Enron) and 
have to bail-out a government insured capital firm who is illiquid because 
they have internalized markets to the point where they are the market, and 
are on the wrong side.  A market can only exist with liquidity and confidence. 
By internalizing investments markets will dry up and soon we will see someone 
implode like an insurance company who self-insures all of its risk, only to 
have a "perfect storm" dry up their capital.

    I believe it is in the best interest of the investing public for the SEC 
to act now on the insidious nature of these capital firms who are internalizing 
investments before both the SEC and the capital markets are further damaged.
 
John T Thomas
Van Der Moolen USA LLC
440 South LaSalle Street, #1825
Chicago, IL., 60605
(312) 362-4230
jthomas@us.vandermoolen.com