Subject: File No.
From: Thomas J. Kanaley, JD
Affiliation: Financial Advisor

October 27, 2010

Dear Sir/Madam:

I am a licensed insurance professional and registered representative. I have been working with clients in the area of mutual fund investing for almost 10 years.

I support new SEC rule 12b-2 and the SECs proposed use of the terms marketing and service fees and ongoing sales charge in place of 12b-1 fees. These new changes allow client service to be paid for and improve transparency in disclosure documents.

However, I strongly object to the SEC permitting mutual funds to issue a new class of shares at net asset value that would allow broker-dealers to set their own sales charge and commission amount. I believe that this rule could result is harm to the middle market and lower middle market investor.

The proposed change is intended to increase competition based on price and cost. That sounds good, but I believe that as broker-dealers lower their sales charges and fees in an effort to gain market share, it will no longer be financially feasible for registered representatives to continue to provide individualized advice and ongoing service to our middle and lower middle market clients.

As a result, we would be forced to focus our practice on the upper-income investors who can afford assets-under-management arrangements or higher cost/higher service classes of shares will continue to receive personalized investment advice.

The result will be that investors with smaller fund account balances will be forced to self-direct their accounts if they wish to continue to own mutual funds. Advisors like me will no longer be able to afford to spend the time to guide and advise them, leaving discount brokerage fund platforms as their only affordable option. In my experience, these platforms do not provide the advice, guidance and service that most people need.

Very Truly Yours,

Thomas J. Kanaley, JD