Subject: File Number S7-09-09

July 7, 2009

I read the proposed text of this proposed rule with great concern. I believe that it is unnecessary and would place a great burden on smaller investment advisors. I believe that the rule is particularly unnecessary when advisors have custody of accounts that are domiciled with qualified custodians. Qualified custodians generally place more stringent controls on such accounts, as they are worried about liability themselves in the event of advisor misconduct. I serve as the trustee of three trust accounts domiciled at Charles Schwab & Company. When these accounts were established, Schwab required that a third party be notified and involved in all non-trade activities such as disbursements, expense payments, etc. I would expect other qualified custodians to have similar controls. Perhaps this proposed rule is more appropriate in cases where no qualified custodian is involved, although I am skeptical of that as well.

In addition this proposed rule, combined with the plethora of other rules, policy and procedure requirements of the SEC, places an undue burden on small advisors. This potentially reduces advisor choice for the consumer as fewer and fewer small advisors are able to economically justify staying in business. This is bad policy for a government agency. Small businesses are the growth engine of America. Let's support them instead of burden them.


Robert T. Stenson