Subject: 'File Number S7-09-09'

July 2, 2009

Like many Registered Investment Advisors, FBB Capital Partners uses third party, unrelated, custodians to custody our clients' assets, and we conduct our business under a Limited Power of Attorney which allows us to make trades in their accounts and to have our fees deducted from those accounts. This business model has become extremely common, and is the standard used at our custodians, TD Ameritrade and Charles Schwab and Associates.

We use a third party,unrelated, custodian to avoid the 'Madoff effect', the risk that we would in some fashion be able to run off with our clients' assets, or that they would not be invested on their behalf in the first place. All securities our held in our clients name and custodied at a third party NASD broker/dealer. Clients recieve seperate notifications from the custodian on all transcations in the account and independent statements, mailed directly to them from the custodian. They are also able to directly go online at any time and look for themselves at what they own and the history of the transactions in their accounts, including fees and trading costs.

The possibility of an issue arising could be easily colved by prohibiting an advisor from also being the custodian; if you want to go the audit route I believe you should limit the audit requirement to those advisors who either have custody themselves, have custody with a related party, or have a custodian who's only client is the advisor. There may be other types to include, but those of us who went out of our way to specifically choose a large, independent custodian for our client in order to avoid the possitibility of this type of fraud should not be burdened with these costs just because some advisors chose an approach less protective of their clients.


Susan B. Fulton
FBB Capital Partners