January 10, 2003

TO: Files
FROM: Daphne Tippens Chisolm
Counsel to Commissioner Goldschmid
RE: Release Nos. 34-42099; IA-1845; File No. S7-25-99

On December 27, 2002, Mercer Bullard of Fund Democracy met with Commissioner Goldschmid and Daphne Chisolm, counsel to the Commissioner. The discussion concerned, among other things, the Commission's proposed Investment Advisers Act Rule 202(a)(11)-1. (see Certain Broker-Dealers Deemed Not To Be Investment Advisers, Release No. IA-1845 (Nov. 4, 1999)). Mr. Bullard expressed his firm's view that the proposed rule is effectively a final rule adoption. He also stated that Fund Democracy would make efforts to challenge the rule proposal in court.