Subject: File No. S7-17-11
From: Roger Alsop

June 16, 2011

I am a U.S. citizen and tax payer.

The main issue I have with the proposed rule change is that it raises the limit far too quickly all at once. For example, assuming that many affluent investors own a home with a value of $700,000 or more that is paid off then by raising the limit from $1.5M to $2.0M plus excluding the value of one's primary residence then you really are effectively raising the limit from $1.5M to $2.7M, or a giant 80% increase all at the same time

This big of jump all at one time will be very detrimental to small hedge funds and investors who want to invest in hedge funds. I don't think this was the intent of the Dodd-Frank bill. Instead the increase to should be more slowly phased in over time to give investors and hedge funds the necessary time to adjust and react.

So instead of doing such a big, potentially greater than 80% jump at one time I request you instead gradually increase the limit over time by doing the following:

To begin with please do not exclude a person's primary residence from the new net worth calculation. This is not required by the Dodd-Frank act and should definitely not be done. This has many issues including the unfairness issue to home owners versus renters, etc. Plus, by removing this from the proposal the jump would then be moderated to just be $1.5M to $2.0M which is still a large 33% jump but much more reasonable.

Next, please don't make such a big jump from $1.5M to $2.0M all at one time. Instead please scale this in slowly over time. Perhaps you could increase it by $100,000 ever two years until you get to the $2.0M level and then increase it at the inflation rate or the rate at which U.S. household net worth increases (or decreases) over time after that.

Lastly and probably most importantly please create an exception for those already invested in a hedge fund so that they don't have to be subject to this rule change and be kicked out of their existing investment. Such a change would be disruptive for the investor. Please keep the best interest of the investor in mind. Instead, the investor should be made aware of the rule change and decide when (if ever) is the right time for them to withdraw their investment from a particular hedge fund if they happen to fall below the new net worth requirement. Forcing them out at an arbitrary time would be bad. Please leave the timing up to the investor. Please "grandfather" in these existing investors and give them an exception to the new rule as this will also greatly help smooth the transition.

Thank you for considering my feedback. I do hope you will consider ways to ease this transition and avoid making too big of change too quickly that would hurt both investors and hedge fund managers. Please be prudent, deliberate, slow and careful with making any change in order to avoid unintended negative side effects for investors and small businesses. Thank you.