Subject: Proposed new rule Date: 05/10/2000 1:18 AM Chairman Arthur Levitt United States Securities and Exchange Commission Washington, D.C., 20549 File No. S7-25-99, "Certain Broker-Dealers Deemed Not To Be Investment Advisers." Dear Chairman Levitt: I am disappointed to find that, with a proposed new SEC ruling, the SEC apparently has succumbed to bank/brokerage industry pressure. It seems to me to be most unwise, and to definitely NOT have the public interest in mind. As I understand it, this rule would, under certain circumstances, exempt broker-dealers from regulatory requirements of the Investment Advisers Act of 1940. The three criteria that would provide this exemption have been explained to me as follows: 1. The fee-based advice is provided to the customer on a non-discretionary basis. 2. The broker-dealer discloses to the client that the account is a "brokerage account." 3. The advisory activities are "solely incidental" to the brokerage services. I believe you are greatly overestimating the financial intelligence, information, and acumen of the vast number of today's investors. I, myself, am aware of a significant lack of expertise in the members of the banking and brokerage industry to whom I speak almost daily. This combination will allow the blind to lead the blind. Further, I fear that those in the brokerage industry who are not blind will be encouraged to "scalp" the poor investor. I am a fee-only investment adviser. I do not associate myself with any bank, brokerage, mutual fund company, or broker-dealer. Sincerely, Nancy L. Russell, Ph.D. Russell Associates