Subject: File No. S7-09-09
From: Joseph Borriello, Jr.
Affiliation: FPA Member

July 1, 2009

The ability to automatically debit fees from client accounts, with client authorization, does not make the entity debiting the fees a custodian. A custodian is a guardian, warden, curator, janitor, or keeper. An advisor who collects their fees automatically from client accounts does not demonstrate custodial entitlements or responsibilities. If I authorize the phone company to debit fees from my account that does not make them a custodian it simply gives them authorization to collect their fee.

This is a poor attempt of the SEC to try and save face in the wake of Madoff, when the SEC grossly neglected their duties and responsibilities as a regulator. The complete incompetence that all of the regulators have shown, FINRA and State Banking Authorities included, especially over the year, warrants for their removal and start anew with one regulator with a principles based system.