Author:  "Jim Ellman" 
          Date:    8/2/98  7:43 PM
          
          Subject: Ref. File No. S7-20-98
         
          I am a "small" advisor whose assets under management float between $23 million
          and $27 million. I have chosen to remain registered with the state of
          California.

          I use use mutual funds exclusively for building portfolios for clients. I use
          Schwab Institutional as a custodian. Money goes from clients to Schwab, and from
          Schwab to the funds.

          I have been told by Schwab they will be Y2K compliant before the year 2000. Our
          database company, Financial Computer Support Inc assures us the software we use
          is year 2000 compliant at this time.

          Why shouldn't firms using the methodology we use be exempted from the
          requirement, assuming they  are registered with the SEC? Passing the $25 million
          mark in assets under management and being registered with the SEC does not seem
          to be precise enough criteria for imposing this new proposed requirement.

          There must be hundreds of advisors using mutual funds exclusively and dealing
          with Fidelity, First Trust, or Schwab Institutional as custodian.