Subject: File No. S7-34-11
From: Sidney Jacobs

October 17, 2011

I find it odd that traded REITs are being lumped together with nontraded REITs. The traded REITs appear to be well regulated and properly functioning entities with which the investing public is familiar. The nontraded REITs seem to have at least a few products which are problematic. Why call into question the leverage of traded REITs when the repo borrowing they do does not dilute the common stock? Why call into question their tax status when they appear to be following the law? And why call into question their very structure as REITs even when they deal primarily in Government securities? Does not the definition of investment company assets in the 1940 Investment Company Act exclude Government securities? Are you planning on writing legislation for Congress to change the law? Isn't it more likely that the SEC will change its rules to clarify when an investment company cannot be a REIT?