Subject: File No. S7-40-04
From: Kelly S McEntire
Affiliation: Retired State of Utah Administrator

December 8, 2005

SROs are over run with self interest and the interests of the organization, not the investor.

I know of a particular situation where an SRO allowed a member to leave work after purchasing inflated service credit. Only to turn around two years later and tell the person that they had not retired but had abondoned their job. Thus disqualify them for any ongoing benefits or other property of a beneficial nature.

SROs are like hiring the wolfs to watch the sheep. They have an inherient conflict of interest that could effect a potential employees preformance both positively or negatively depending on the value of the employee to the economic issues of the organization over shadowing the performace side of employee development.

And it can go the other way as the person becomes a liability the SRO's can manage problems through the deparment of labor without ever involving the SEC.

Seperation is necessary between management functions and investment functions. Same with the need for outside auditing agencies and somehow police trust and items of beneficial interest to make sure that they are not abused by the lack of discemination of information.

JKS McIntyre