Subject: File No. S7-25-06
From: Henry Lu
Affiliation: President, BlastInvest LLC

February 22, 2007

To whom it may concern:

I have been investing my personal money in US stock market for more than a decade and I am currently in the process of starting up a small hedge fund.

I am opposed to the new proposed rule restricting hedge fund access and cut the qualifying investors by 80%.

Your proposed new rule would kill the market for start up hedge funds or small hedge funds, and stifle competition in this field against new entrants. It is well expected that this new rule will hurt small hedge funds or start up hedge funds significantly more than big hedge funds because startup/small funds predominantly rely on those sub-$1 million to $3 million net-worth angel investors or not so-rich non-institutional investors.

The current hedge fund rule already is denying more than 91% of households according to your study so that majority of public investors are already well protected without access to this industry. The further restriction to allow only 1% of super-riches in America is unnecessary. Those who make $200,000 per year or $1 million minimum net worth are not less sophisticated than those 1% super-riches. The protection should be on level of investors' knowledge, more transparency of hedge funds rather than merely the size of money.

As a homeowner myself, I am also troubled with newly created "accredited natural person" criteria of $2.5 million liquid net worth excluding real estate. Net worth of home ownership is excellent diversification for any household and there is no indication that homeowners are less sophisticated than non-homeowners with pure liquid assets. The discrimination against real estate asset is unnecessary.


Henry Lu