Subject: File No. S7-09-09
From: William T. Hepburn

July 1, 2009

As a small RIA firm who might be deemed to have custody under proposal IA-2876, I must say that the part of the proposal that would require extensive surprise audits at my firms expense, is dramatic overkill.

The cost of such a requirement would put a disproportionate burden on small firms such as mine, vs. larger firms who can more easily absorb such costs. If the SEC wishes to end up with only large firms in this industry Proposal IA-2876 is a good way to accomplish that. I believe that small firms provide a very beneficial function and should be protected from regulations that would squeeze them out of business not subjected to them.

I can appreciate your effort to protect clients assets, but the proposed rule is a very inefficient way to accomplish that. A simple solution to avoid being deemed to have custody would be a provision that required the client, when opening an account at the custodian, to put a limit on fee withdrawals 3% annually might work and require written authorization for withdrawals over that limit. This would allow the business to continue without undue overhead being added, and protect the client.

Thank you.

William T. Hepburn, President
Hepburn Capital Management, LLC.