Subject: File No. S7-34-11
From: Dennis M McCrone

September 6, 2011

I would like to state that I am opposed and in disagreement with the SEC and its attempt to amend Rule3A-7 as it refers to REITS and the investment category Mortgage Backed Securities.
This classification of securities, commonly known as MBS, is an important component of a dividend investment strategy not only for institutions but especially for small individual investors. Many retirees, (including myself), endowment funds, libraries, credit unions, hospitals and of course the US Treasury depend on maturing securities for monthly and/or quarterly income which on an individual basis is taxed as ordinary income. This income is not passed to individuals on a tax-free basis.
It is no secret the US has a critical unemployment and underemployment problem and any loss in interest income or decline in values will only add to this issue by lowering demand due to a reduction in living standards, especially for retirees.
It has been publically stated individuals hold between 50 to 60 percent of all MBSs. Over the last ten years banks, brokerage companies, investment advisors and the media have clearly outlined the risk/reward components of MBSs. We have been well informed and can make prudent decisions on owning or not including MBSs as part of a dividend strategy.
To change the rules now regarding REITS and their investments in MBSs after the game has started is unfair.
It may be as a public service you are trying to protect us from ourselves, please dont. The SEC will be guilty of malpractice and certainly will hurt small investors along with the economy if you enact the proposed changes.