Subject: File No. 4-606
From: Peter M Smith

July 31, 2010

This proposed rule will result in "unintended consequences" ( as most "over the top "government agency actions do ) by narrowing the number of Advisors to those who can afford to buy malpractice insurance similar to that Doctors have to purchase. It will put thousands of smaller advisors on the the burgeoning unemployment rolls as only the largest ( Madoff Type ) advisors will survive. It will reduce competition in the industry with fewer and larger players .
The suitability standard has worked well for clients for many years . To put this proposal in place will be another "over the top" regulation that will cost jobs and narrow the choice of advisors available to the public.
I would much rather see enhanced auditing efforts buy the SEC with Director ( Shapiro ) sign offs ( similar to Sarbanes Oxley for Corporate CEOs ) for the largest broker dealers to prevent Madoff type of scenarios . What is being done in that area ?

Sincerely ,
Peter M. Smith