Subject: File No. S7-09-09

July 14, 2009

Re: Custody of Funds or Securities of Clients by Investment Advisers
File No. S7-09-09

I am writing to express my opposition to the proposed rule 206(4)-2(4) requiring all registered investment advisers with custody of client assets to obtain an annual surprise examination by an independent public accountant. Advisers who are defined as having custody solely because they deduct advisory fees from clients’ accounts should be excluded. Such requirement for registered investment advisers who otherwise would not have custody except for how compensation is being collected from their clients imposes a considerable financial/regulatory burden!

With the drop in business we've already experienced, we will not be able to manage the additional charges of hiring a CPA for surprise examinations just because we collect our fees from our client accounts. In addition, our broker caps the maximum amount of fees we can collect from our client accounts and I believe this is a reasonable measure to ensure there's no abuse or mistakes.

The problems we've recently witnessed in the financial markets in relation to ponzi schemes have more do with with enforcement of existing laws. It has nothing to do with the way registered investment advisors collect their fees.

Thank you for your time and attention.


Naushad Virji
Senior Investment Advisor
Virji Investments, Inc.