Subject: File No. S7-09-09
From: Stanley E. Thomas
Affiliation: Thomas & Atkinson Capital Management LLC

June 30, 2009

I would like to comment on the proposal by the SEC to consider deduction of fees from a client’s account as “custody” of client assets by the RIA.

I am unaware of any abuse in this area. We custody many of our clients at Charles Schwab & Co., and have our clients’ authorization to deduct fees directly from their accounts. We, as a matter of firm policy, send our fee invoice to the client prior to submitting the invoices to Schwab for payment. This informs the client each quarter as to the precise amount of our fee, and encourages them to call if they have any questions about our charges. In addition, Schwab reviews the fee requests for reasonableness as well as checking to be sure the client has authorized the direct payment.

How this constitutes “custody” is surely some perverse use of language as well as fact. How is setting up an electronic fund transfer with the client’s bank to pay our invoice any different. Do we now have “custody” of the client’s bank account?

We take our fiduciary duty to our clients very seriously, but this proposal does nothing to further the protection of client assets. It adds significant time and costs that could be better spent on helping clients make the best investment decisions.