July 19, 2007

Dear SEC, It has been brought to my attention that the SEC is considering eliminating 12b-1 fees from the securities industry as they "no longer serve their original purpose." I vehemently oppose this proposal and rigorously contend that 12b-1 fees function as a viable tool for Registered Representatives in their role to service their clients. Dismissing 12b-1 fees would not only have a far-reaching effect on the securities industry, but more importantly, the individual Registered Representative. This in turn affects the representative's capabilities of counsel, thereby crippling the client's accessibility to pertinent information regarding their investments. This proposal cannot be ratified under any circumstances.

Successful Registered Representative build lifetime relationships with their clients, and while Representatives get fairly compensated up front for the money that is placed under their management, it is the years of ongoing service that is of the greatest value. Staff and resources are needed to provide these clients with services to their accounts, no matter what the size, and 12b-1 fees act as a means for these services to be provided without compromising the business of the Representative.

Clients are also kept abreast of their investments' current progress and changes in market conditions. These services further benefit the client and they would not be a possibility without 12b-1 fees. To repeal 12b-1 fees would be handicapping the Registered Representative by taking away another resource that is presently available to them.

Additionally, one must look at the practicality of 12b-1 fees from the perspective of the Registered Representative. These fees generate a revenue stream that is not easily substituted, with fee-based advising being the only other alternative that would produce a similar amount of revenue. However, the conversion from Registered Representative to a Registered Investment Advisor (RIA) does not fit in most Representatives' business plans nor is it compatible with their resources or qualifications. The absence of 12b-1 fees would compel Registered Representatives to make the conversion to a RIA, putting their business at an unnecessary risk by while at the same time diluting the quality of the RIA field in the securities industry.

12b-1 fees began over 25 years ago as fees due to rising distribution and advertising costs of mutual funds to the public. These fees have had an evolution throughout the years, transforming into a revenue resource that have given many Registered Representatives a foundation in which to establish their business. These Registered Representatives have depended to this revenue their entire careers, with 12b-1 fees making up a considerable percentage of their annual income. Eliminating these fees will paralyze these Representatives, possibly ending their practices. How can the SEC, NASD and NYSE justify the decision to write off 12b-1 fees knowing this action can potentially end thousands of registered representatives' careers?

I can bring up many more arguments to justify the validity of 12b-1 fees; however, the main purpose of this letter is to bring to attention the necessity of 12b-1 fees to registered representatives and ultimately, the clients. Without these fees services and resources established to aid the client would no longer be available, leaving them in a poor position with their investments. The SEC needs to continue to allow 12b-1 fees as they are set with the clients' best interest in mind. Should this proposal be passed, Representatives will no longer have the benefits needed to give the clients the services they enjoy presently and the securities industry will have a negative lasting impact. The SEC should take this consequence into consideration before handing down its decision. Consider carefully.

Sincerely,

Mr. Anthony Reguero
Chairman
ACTIONS Inc.