U.S. Central Credit Union

September 24, 2002

Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549-0609

Dear Mr. Katz:

U.S. Central Credit Union ("U.S. Central") is pleased to comment on proposed revisions to Rule 206(4)-2 concerning custody of funds or securities of clients by investment advisers promulgated under the Investment Advisers Act of 1940 as published in the Federal Register on July 25, 2002 (the "Proposed Rule").

U.S. Central is a wholesale corporate credit union whose members consist primarily of other corporate credit unions. U.S. Central and its corporate credit union members are collectively known as the corporate credit union network. U.S. Central serves as custodian of securities owned by corporate credit unions or held in safekeeping by corporate credit unions for their natural person credit union members.

Within the context of Article 8 of the Uniform Commercial Code, U.S. Central is a securities intermediary for 32 of its corporate credit union members. Those corporate credit unions are, in turn, securities intermediaries for 1500 of their natural person credit union members. Currently, U.S. Central, as custodian, has possession of approximately $60 billion of securities owned by corporate and natural person credit unions.

The Proposed Rule would require an investment adviser to maintain client securities with a "qualified custodian". The proposed definition of "qualified custodian" would not include a credit union. The Commission has requested comment on whether other financial institutions should be included as "qualified custodians".

We believe that the definition of "qualified custodian" should be modified to add a corporate credit union subject to regulation by the National Credit Union Administration ("NCUA") as an acceptable "qualified custodian". This change would permit those credit unions using an investment adviser to manage part of their investments to continue to maintain the safekeeping of their securities within the corporate credit union network. In this regard, we note that the NCUA regulates and examines the safekeeping operations of all corporate credit unions.

We believe that our requested change is consistent with the rationale of the Proposed Rule and would not result in any increased risk for credit union clients of registered investment advisers.


          Dan Kampen
          U.S. Central Credit Union