Subject: File No. S7-26-07
From: Scott Harper
Affiliation: Series 7, 66, 24 and CA DRE licensed

November 17, 2007

I have been reading the comments since I first made mine on November 14th (see below). It's clear from this sample of security brokers (some are dual licenced as I am) are not thrilled with the idea of the securities regulators bending the rules to allow for this proposed exemption. I see no benefit to the public in allowing this exemption. The only argument that comes up in favor is that it will help all of us sell more TICs. So what? That's not a good reason to allow for the exemption. Legally bribing real estate agents for leads to the highest bidder is definitely going down the wrong path. On the other hand, consider that the NAR is pressuring the securities regulators and this exemption may be a compromise. (Apparently, several states are threatening to not allow a securites broker to sell real estate, even in the form of a security, without a real license in that state. To be licensed in every state would be 1) impossible because of residency requirements in most states, and 2) at a minimum impracticle, time consuming, expensive and burdensome. If this were to happen it would have serious effects for real estate-related securities offerings such as TICs and possibly other real estate-related securities offerings.) These are the "political" issues I alluded to below. If true, then our securities regulators may be looking for a truce through compromise. Under such conditions I am in favor of an exemption as long as it is more specific and stricter than the current proposal. Otherwise, we securities brokers will have the majority of the liability because of our stricter rules and active enforcement, and the interpretation of this exemption will be left to the discretion of the arbitrators and courts after a problem has occured.

I am pleased that our opinions are being sought and hope more commercial real estate professionals respond. All sides need to be carefully considered.