From: Todd C. Ganos [tganos@pacbell.net]
Sent: Monday, September 30, 2002 2:30 PM
To: rule-comments@sec.gov
Subject: S7-38-02

This e-mail expresses opposition to the proposed rule that would require
investment advisor to document and maintain files on proxy ballots, IA-2059.

Imagine this: a small investment advisory firm has four employees, 150
accounts, and a universe of 150 or so stocks receives thousands of proxy
ballots each year.  This proposed rule would require this small investment
advisory firm to document its justification for every single vote for each
issue on each proxy ballot from each company.  The write-up for each vote
would necessarily require documentation of each respective client’s specific
needs and preferences.

It should be noted that a client’s specific needs and preferences go beyond
economic value.  Certain clients, particularly religious organizations and
non-profits, may have socially conscious proxy voting preferences.  So, let’
s document the trade-off between the economic value of a vote versus the
subjective social value of a vote.  And, let’s document the methodology and
factors that we used to determine the subjective social value.

The time required to accomplish such documentation would require the hiring
of a full-time employee.  Because this deals with evaluating the economic
interests of the clients, this additional employee would not be an
administrative individual, this additional would necessarily be an
investment decision-maker.  Hiring such an individual would add at least
$60,000 per year in expense to a firm.

Then, there is the physical storage of this documentation.  For this small
investment advisory firm, an additional filing cabinet would be needed each
year just to store this information.

Then, the extra employee and the extra filing cabinets require square
footage . . . and that costs rent.

The time, expense, and storage that would be required by this rule would be
oppressive to investment advisory firms.  Please do not adopt this proposed
rule.

Thank you for your time,

Todd C. Ganos
P.O. Box 221610
Carmel, CA 93922-1610