Subject: 'File Number S7-09-09'

July 2, 2009

We feel that small advisors that only take fees from clients accounts and have no other custody should not be held to a rule that would require additional and expensive surprise audits. We trade through TD Ameritrade. Their computer monitoring systems make certain that fees are always held within a reasonable standard.

Being subject to surprise audits would add an increasing level of expense when small businesses, like ours, are struggling to survive in today’s bear market. We are a small firm and manage about $30 million. Our average annual fee is less than 0.75% per year. We do not wish to raise fees to our clients to cover the costs of additional auditing.

We also do not wish to lay off an employee to reduce our costs.

We feel the proposed rule would negatively impact our business and oppose this rule change.


Richard D. Smith
Protected Capital Management