Subject: File No. S7-37-10
From: Portfolio Manager

January 24, 2011

We are a mid-size private fund manager located on the East Coast managing several funds of both public and private investments. We have approximately $570 million in investor money. I would like to comment on the mid-size private fund adviser rules. I was previously a principal with a EU-based firm. In discussions with my former company, I understand they will be exempt from registration because they intend to shut down their US office and even though they intend to regularly travel here to meet with investors. This is because you are allowing them to not count their billions under management from US investors "in the United States" merely because they will no longer have a US office. I have consulted DoddFrank experts on this and have been told despite earlier statements that Congress intended non-U.S. managers with $25 million from US investors to register, the SEC is giving them a new free pass in calculating assets as long as they are managing outside of the US and even if they meet investors here. I was also told you could have a US office and give advice without trading authority here and not be registered even though that advice would be used with US funds by the EU manager who would trade the fund.

What kind of proposal is this? Now these offshore firms can have lots of US funds (I was told they could have only up to 14 earlier) and raise unlimited US dollars. You will make the US less competitive with other countries and have people move offshore to avoid regulation or shut down existing US offices. I have resigned myself to the registration process but can't for the life of me figure out how you come up with this proposal on language that looks clear to me. My former firm should be required to register because they have $25 million (actually more like about $1 billion) from numerous US investors and market their funds here to private US investors. They have much greater resources than I have and frankly more US activity than I have. They can market on a track record that looks more favorable than mine because they don't need to follow your rules. In today's environment you can manage money from anywhere with a laptop and wi-fi. Why are you making the climate less favorable for US firms and investors? If I can figure out what a twisted interpretation of "in the United States" this proposal makes, I would think you could also and think you should consult Congress on what they meant since I was told it should be $25 million from investors here for registration of foreign managers.

As I understand it my company will also need to be registered in Europe at some point soon if I want to continue to find investors there. Please reconsider and don't make us less competitive with offshore firms since they will not have to follow the same rules I will need to follow. If you raise significant money here you should be on the same level playing field as the fund managers located here so that we can compete fairly.

Thank you for considering my comments. Please consider the real life consequences in the US for your rules.