Subject: File No. S7-24-15
From: Philip R Huber, CFA, CFP
Affiliation: Chief Investment Officer, Huber Financial Advisors

March 25, 2016

Dear SEC,

I work for Huber Financial Advisors, LLC (Huber Financial), an SEC-registered investment advisory firm based in Lincolnshire, IL. Huber Financial serves more than 900 individual investor clients with total investable assets of approximately $960 Million. I am writing in reference to the SECs proposed new rule on Use of Derivatives by Registered Investment Companies and Business Development Companies (hereinafter Proposed Rule).

We have long been advocates for individual investors and completely support the need for regulation to ensure investors have access to high-quality investment strategies that have appropriate investor protections. It is precisely this stance that leads us to nearly exclusively use funds registered under the Investment Company Act of 1940 in the construction of our clients portfolios. Proper diversification is the cornerstone upon which our asset allocation process is built. Much like an allocation to high quality bonds can balance a portfolio of stocks, we feel certain "liquid alternative" strategies can enhance diversification through the addition of return streams uncorrelated with the broader equity and fixed income markets. We find many of these alternatives more valuable than ever in today's environment of very low return expectations in traditional "safe" investments.

My primary concern with the Proposed Rule is that it is overly restrictive and may negatively impact the diversification benefits of several funds that we use and could ultimately dampen the risk-adjusted returns that our clients need to meet their financial goals. There is no doubt that without proper oversight and regulation, the excessive use of leverage and derivatives for speculative purposes could lay the groundwork for another Financial Crisis. That being said, the tools used by liquid alternative funds are different than those that got us unto the mess that was 2008-09. Strategies that use derivatives for risk management purposes are not an apples to apples comparison to those that use derivatives to make highly leveraged speculative bets. It is my hope that the Commission takes this distinction into account when determining limits of total gross notional exposure. Because the assets underlying different categories of derivative instruments can vary significantly in terms of their volatility and risk, a "one size fits all" should not apply. Two different assets with the same gross notional exposure could be worlds apart in terms of how risky they are. A blanket ruling on this measure would, in my opinion, limit the effectiveness of funds that are already managing money in a prudent, conservative manner.

I encourage the Commission to reconsider some of the specifics of how they are looking to implement the Proposed Rule. There are many "liquid alternative" funds run by high quality asset managers that give advisory firms like Huber Financial the tools to deliver more diversified portfolios to a much broader audience of investors. Individual investors need to be protected, but they should also be able to have the same access to high quality investments that until recently, have only been available to the wealthiest of investors. Thank you for your time and consideration.


Philip R. Huber, CFA, CFP
Chief Investment Officer
Huber Financial Advisors, LLC