Subject: File No. S7-18-07
From: Dr. Gavin Clarkson
Affiliation: Assistant Professor, University of Michigan

October 9, 2007

October 9, 2007

Nancy M. Morris, Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-0609

Comment re: File# S7-18-07

Dear Ms. Morris,

I am a professor at the University of Michigan and have been researching issues of tribal finance and tribal economic development for several years. I also have a doctorate from the Harvard Business School, a law degree from the Harvard Law School, and an MBA from Rice University.

This proposed rule change addresses a longstanding inequity in the Securities laws, and American Indian tribes will benefit greatly from the added flexibility in Reg D as they seek to expand and enhance their economic development efforts. I applaud the initiative taken by the SEC to amend its rules to include American Indian tribes as accredited investors.

My comments respond to the proposal to add "Indian tribe" to the list of accredited investors under Rule 501(a)(3). Tribal governments and their instrumentalities are, like state and local governments, in fact "governments." The Federal government has long recognized Indian tribes under both Federal statutes and long-established legal precedent. For example, the Internal Revenue Code enables Indian tribes and their governmental instrumentalities to issue tax-exempt municipal bonds. Since the proposed changes add a definition of the term "governmental body" to Rule 501(a), similar to the definition of that term that appears commonly in transactional financing, the most appropriate place to include "Indian tribes" is within the list of entities embodied in this definition. Therefore, given the nature of the proposed rule change, I would suggest including "federally recognized American Indian tribes or their instrumentalities" in the list of entities included within the definition of "governmental body" under Rule 501(a). I recommend that only "federally recognized American Indian tribes or their instrumentalities" be included. This limitation, while admittedly excluding some tribes that for reasons of history are not currently recognized by the federal government, does provide a bright line rule for clarity in the markets as to what tribal entities can be an accredited investor.

In summary, "federally recognized American Indian tribes" are governmental bodies and therefore should not be specifically called out in the main text (i.e., under Rule 501(a)(3)), just as states are not called out in the main text. Instead, "federally recognized American Indian tribes and their instrumentalities" should be included in the list of entities recognized as "governmental bodies."

Please note that these comments are my own and do not necessarily reflect the opinions of the University of Michigan or its Board of Regents.


Dr. Gavin Clarkson
Assistant Professor
University of Michigan
School of Information
School of Law
Native American Studies
304 West Hall, 1085 S. University Ave.
Ann Arbor, MI 48109-1107
734-764-2475 FAX