Robert A. Carpenter, Director
San Diego Chapter
National Association of Investors Corporation
6576 Jackson Drive
San Diego, CA 92119

Dear Mr. Carpenter:

In your letter of October 29, 2003 on behalf of the San Diego Chapter of the National Association of Investors Corporation ("San Diego Chapter"), you seek assurances that the staff would not recommend enforcement action to the Commission if the San Diego Chapter matches prospective members with investment clubs. Since that time, you have had two conversations with Brian Bussey, Assistant Chief Counsel of the Division of Market Regulation, Nina Mojiri-Azad, Special Counsel of the Division of Corporation Finance, and myself, regarding your request.

As we have discussed with you, your proposal raises a number of complex issues under the federal securities laws, including whether interests in the investment clubs are, themselves, securities. While private counsel may be in a position to explore these issues with you in detail, as a practical matter we note that the National Association of Investors Corporation currently has a conditional exemption from broker-dealer registration for limited activities.¹ This exemption does not extend to the San Diego Chapter's proposed activities, and the staff would be unlikely to grant relief that would effectively expand NAIC's exemption.

This letter confirms that you are withdrawing your request for relief. If you have any questions, please feel free to contact me at 202-942-0073.

¹ See Letter re: NAIC (June 1, 1979) (granting conditional two-year exemption from broker-dealer registration). The Commission extended the conditional exemption on May 28, 1981.

Incoming Letter:

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/marketreg/mr-noaction/naic051404.htm