Subject: proposed rule 206(4)-2(4) s7-09-09

July 15, 2009

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.

Because most (all?) smaller firms use an independent clearing house which mails out independent statements each month the client is well aware of what assets they own. The burden of having to hire an independent public accountant would be an enormous cost to RIA’s which would have to be passed on to clients.

Thank you

Allan Cohen