Subject: File No. S7-25-99
From: James Smith

February 7, 2005

In reviewing the proposal, I found the staff to have taken a very fair approach. It has recognized that sufficient regulations are in place for both the Broker Dealer and Investment Advisors. Its proposal for additional disclosure is not over burdensome. It allows both segments to compete fairly and maintains protections for the investing public.

My specific comments are as follows.

I believe the staff should continue to allow broker-dealers to rely on the exception in cases where discretion is only used on a limited or isolated basis. Examples would be a) a customer whose is going to be out of the country for a period of time (less than 120 days, for example) and needs the agent to continue to manage the account. b) limited discretion, such as a client giving written authorization for the broker only to raise the price on existing stop loss orders as the security is going up. This kind of limited discretion should not warrant the reclassification of the account to be an advisory client.

Thank you for the opportunity to comment on this topic.

James Smith
Portland, OR