Subject: File No. S7-09-09
From: Sy Lippman
Affiliation: CEO - L S Advisors, Inc

June 29, 2009

I believe that the proposed revisions to Rule 206(4) of the Investment Advisors Act of 1940 RIA's are overly broad in the sense that requiring all investment advisors to undergo an annual surprise examination merely because they have the authority to bill and be paid fees from client accounts is unneccessary. Perhaps some standard of independent custodian could be set up.

If a small advisor ie. 2-5 employees is required to prepare for an annual audit the burden is considerable.

If a standard requiring an independently audited approved custodian was set, it would seem that would adequately protect investors.