Subject: File No. 265-24
From: Chris Carvalho

August 23, 2007

My comment concerns transparency in financial reporting and is made in light of the recent hedge fund/subprime lending crisis. One of the major factors leading to this crisis has been the conflict of interest between bond-rating firms and who pays them, the bond issuers. In many ways this is a similar conflict that existed at the time of the Enron debacle that led to the demise of accounting firms who were paid by dishonest corporate executives to certify the accuracy of balance sheets.

It is time to pay bond-rating firms and auditors by the people who most depend on their accuracy--the investors themselves. I propose that a small fee be levied on all stock or bond transactions that would pay for the expenses of auditing and/or rating a company's securities. These funds would go into a pool which would pay auditors or rating firms. Instead of a company choosing the auditor or bond rating firm, the choice would be made by a small board of independent individuals skilled in matching raters or auditors with the right skills for a particular industry. The firm doing the auditing or rating would change after a set time period. This would prevent any "back-scratching" that might influence an auditing firm to get future business.

While some might oppose this fee because it would increase costs, we all pay right now through market crashes that are fueled by this conflict of interest. As an investor myself, I would be much happier knowing my money was helping to certify the accuracy of the securities I buy.

Thank you for the opportunity to comment.

Chris Carvalho