Subject: File Number S7-09-09

July 6, 2009

SECís Proposed Changes to the Custody Rule Release No. IA-2876

I am a member of the Financial Planning Association and a registered investment adviser representative. I am opposed to the SECís Proposed Changes to the Custody Rule Release No. IA-2876 that would require a surprise audit of investment advisers by an accounting firm.

This appears to be a political reaction after the Madoff scandal rather than a measured regulatory response. I believe that the recent scandals that have occurred are due to a lack of enforcement of current rules by the SEC and FINRA. It seems unreasonable to create new regulations when the current ones are not being effectively enforced.

The SEC already resolved one of the major problems with the custody rule, by eliminating a loophole from registration for certain accounting firms with the PCAOB that Madoff's accountant used to avoid detection of its auditing practices.

To my knowledge, the recent Ponzi schemes uncovered by the SEC had nothing to do with fees deducted by investment advisers. The additional costs associated with the surprise audit requirement would be very expensive and would ultimately be passed on to clients. In addition, the time that advisers would have to commit to the surprise audit would deduct from the time they could be meeting with their clients. In the current financial climate, it is more important than ever for advisers to help their clients through these difficult times.

Instead of enacting this unnecessary rule, I would prefer for Congress to appropriate more funds for the SEC to hire and train additional examination staff to strengthen the regular audit cycle of investment advisers.


Austin L. Maschino
Financial Advisor