From: Chun C. Liang
Sent: February 1, 2007
Subject: File No. S7-25-06

Dear sir/madam,

I have the following comments on the proposed rule change on File Number S7-25-06:

  1. Instead of raising the minimum net worth for accredited investors, it should be lowered or eliminated, to make hedge funds available to all Americans. The "average" investor today is fairly sophisticated, and do understand risks. Certainly investing in options, commodities and such is usually more risky than investing in hedge funds. Investors are more likely to lose all of their money on options and futures than in hedge funds.

  2. Hedge funds, when used appropriately, offer more choices in diversification than the usual investment vehicles of stocks, bonds, and futures. Why should a whole segment of investment choices be denied to the vast majority of American investors just because they do not have sufficient assets to qualify? This smacks of patronizing and class discrimination based on net worth. The government should not be in the business of telling who can or cannot invest in certain class of investment vehicles.

  3. To protect the investors and minimize risks to investors, the hedge fund operators should be better regulated and monitored, to prevent outright fraud and scam. There should be more transparency and education about the hedge funds, to let the investors understand the risks.

Copied below is an article by John Mauldin whose views on this issue I embrace wholeheartedly.

Kind regards,

Chun C. Liang

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