July 7, 2009
Good morning:
I am contacting you to express my opposition to the proposed rule change that would require an annual audit for firms that are deemed to have custody of client funds because they collect their fees directly from the client accounts. The system works fine as it is. I do not have the ability to access client funds beyond the collection of fees, and the custodian of my clients' accounts checks the fees for proportionality relative to the fee structure in place and the account size. The added burden of paying for a pointless audit would drive me to reduce my employee count and create economic hardship. Clients are required by current regulation to receive a statement from me showing exactly how much was drawn from their account to pay my quarterly fee. I again don't see where this new regulation will help anyone and creates another layer of administrative bureaucracy. Would the auditor have to check every account value and measure every fee charged for each quarter? We would be talking about approximately 800 transactions that would need to be checked. Please don't do this in this difficult time for our and every other business. It is not necessary.
Best regards,
Paul V. Herzfeld, Pres.
The Herzfeld Group, Inc.