Subject: File No. S7-25-06
From: Peter A Brotchie
Affiliation: CEO/Morgage Banker

February 24, 2007

As an active "value investor" I manage a portion of my own portfolio and invest with other professional managers.
Perhaps not coincidently, none of those managers went to an Ivy League school or came up through the ranks of Goldman Sachs or some other prominent Wall Street firm.
Rather, they all run partnerships or firms that mirror Warren Buffett's early partnerships in spirit, compensation structures and/or investment philosophy.

I believe this proposed rule will stifle competition and limit the individual investors choices dramatically by making it exceedingly difficult for these small firms to exist. These managers I have referenced are all primarily long only and do not use leverage. They are generally highly concentrated in 8-20 investments and have an extraordinarily high amount of their own personal net worth invested side by side with my funds.

In my view there is inherently more risk in the mortgage products a first time buyer can select at any one of thousands of financial institutions than there is in these funds.
Perhaps we should be more worried about who is taking "No Doc, Interest Only, Option Arms" with the potential for negative amortization than setting seemingly arbitrary thresholds of liquid net worth as a proxy for financial sophistication.

Peter A. Brotchie