Subject: File No. 4-606
From: Robert O.L. Lynn
Affiliation: Financial services consultant

August 30, 2010

With regard to the 14th area of request for public comment, I believe the study must shed light on how the SEC can keep up with the efforts that Brokers, Dealers, and Investment Advisers are certain to make in order to neutralize the impact of new regulations. Free-market forces, rightfully, are dynamic while regulations are static. Consequently, Brokers, Dealers, and Investment Advisers always have the means to game stationary regulatory frameworks in order to offset margin erosion from their competitors.

The SEC study should inform a forward-looking paradigm that empowers regulators to react to gaming in real-time, rather than informing the creation of additional backward-looking regulations. Obtaining skilled personnel who understand the operational details, not just legal issues, behind gaming the regulations should be a key step in establishing a quick-footed SEC.

Perhaps preventing the recurrence of past crises by adapting regulations will improve the stability of the worlds most efficient financial system. But how much more efficient might our US financial system become if its competitors benefit more from allocating capital to efficient investments rather than to outwitting regulators?

Robert O.L. Lynn
Financial services consultant