Subject: File No. S7-09-09
From: Stephanie Brown
Affiliation: CCO, Merriman, Inc.

July 22, 2009

Regarding: File Number S7-09-09

To whom it may concern:
I am writing in response to the SECs proposed changes to the custody rule, Release No. IA-2876. I am opposed to the requirement in the proposed amendments to the custody rule that would subject investment advisers to a surprise audit by an accounting firm, solely because those advisers automatically deduct client fees from their investment accounts.

The Ponzi schemes uncovered by the SEC had nothing to do with fees deducted by investment advisers. As far as I am aware, there have been no systemic problems in this area, and the additional costs that will be borne by investment advisers and our clients is both unnecessary and burdensome (particularly for small investment advisers). Our client's assets are held at a third-party custodian, and the amount of the fees debited for our services are always clearly itemized on the client's monthly statements.

I can understand the need for increased regulation in the financial services industry, but the costs involved in implementing these surprise audits would be extremely costly and burdensome. Ultimately, these increased costs will end up being passed on to our clients, the very individuals this additional regulation is designed to help.

In order to enhance consumer protection, I would support Congress appropriating additional resources to the SEC to hire and train additional examination staff to increase the regular audit cycle of investment advisers.

Thank you for your consideration.