Subject: File Number S7-0909

July 23, 2009

Ms. Elizabeth M. Murphy Secretary
United States Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

RE: Proposed Amendments to Rule 206(4)-2

Release No. IA-2876

File No. S7-09-09

Dear Ms. Murphy:

Ponder Financial Group appreciates the opportunity to express its views in response to the Securities and Exchange Commission’s (the “Commission”) request for comments on the proposed amendments to Rule 206(4)-2.

As an investment adviser registered with the SEC, under proposed amendments to Rule 206(4)-2,

We would be deemed to have custody solely because we have the authority to deduct advisory fees from our clients’ accounts, all of which are maintained by our independent, qualified custodian. We strongly believe that the portion of the proposed Rule, which would require advisers with this form of custody to undergo an annual surprise audit, is not warranted.

As required by current Rule 206(4)-2, the independent qualified custodian maintaining our clients’ accounts delivers account statements, on at least a quarterly basis, directly to clients, identifying the amount of funds and securities at the end of the period as well as all activity in our clients’ accounts. As a result, our clients receive comprehensive account information directly from the qualified custodian and are thus able to monitor the activity in their accounts. Furthermore, our clients agree, in writing, that our advisory fees will be deducted directly from their advisory accounts. Accordingly, the safekeeping measures currently required by Rule 206(4)-2 provide my/our clients with the ability to sufficiently identify and detect erroneous or fraudulent activity.

Based on the Commission's estimates, we would be subject to the surprise examination requirement and we would pay an accounting fee, on average, of $8,100 Such an expense would financially impair our operations. This burdensome expense seems particularly difficult to justify when the surprise examination is directed primarily at verifying client funds and securities. That verification of client funds and securities is unnecessary when there is an independent qualified custodian and will do nothing to address the Commission's central concern: whether we have improperly withdrawn amounts in excess of our stated fees.

In addition, as we imagine would be the case with other advisers, in the event we were unable to absorb and/or pass on the costs associated with an annual surprise audit, we would be forced to eliminate the direct debit of fees and instead require clients to pay our advisory fees directly. This would require a complete revamping of operations and our accounts receivable process and would increase overhead costs. More importantly, in many cases, such a change in billing practices would confuse clients and require them to reorganize their banking arrangements, thereby adversely affecting our clients.

Given that the existing safeguards in place are adequate for firms in our situation, and considering the adverse effects of a mandatory surprise audit on us as well as clients, we respectfully request that the SEC leave current Rule 206(4)-2 intact and unchanged with respect to advisors who have custody solely because they have the authority to deduct advisory fees from client accounts.

We thank the Commission for the opportunity to comment on this matter.

Yours truly,

R. Scott Ponder, MBA, CFP

President, Ponder Financial Group
Registered Representative,
Associated Securities Corp.