Subject: File No. 4-590
From: Gregory Simck, CFA

September 29, 2009

In my experience with securities lending programs, the program managers often share in the earnings for these programs (e.g., the "80/20" split) but do not share in the principal losses on the reinvestment of cash collateral. This asymmetric risk/reward relationship can create situations whereby program managers are incentivized to maximize cash collateral investment yields through investing in longer maturity, less liquid, and/or more risky investment vehicles, including structured finance vehicles, with minimal regard to preservation of principal. Accordingly, clients may be subject to a lower level of fiduciary duty from securities lending program managers.