Subject: File No. S7-25-06
From: Peter Shaw
Affiliation: Blue Wing Capital Management LLC

January 27, 2007

I suggest that the new minimum net worth requirements being proposed for hedge fund investors is far too restrictive. Indexed for inflation, the original $1 mil net worth requirement of 25 years ago would be $1.9 mil in today's dollars.

I suggest that net worth requirements themselves are a blunt instrument for defining suitability. Diversification is the key to financial protection. Any investor with a bulk of their net worth previously tied to Enron or Worldcom are examples of undue financial risk. Foreign investors have access to a wider variety of investment alternatives than US investors. This does not serve our society well as we face the crush of an aging population in need of retirement income.

If you must, simply index the minimum standard to inflation. I suggest you keep the standard at $1 million, but add legal penalties for those who don't monitor suitability more closely.

Thank You,

Peter Shaw