Via electronic mail

October 10, 2002

Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, NW

Washington, D.C. 20549-0609

Re: Release No. IA-2044; File No. S7-28-02; Custody of Funds or Securities of Clients by Investment Advisers

Dear Mr. Katz:

We are pleased to provide comments on the Commission's proposed amendments to Rule 206(4)-2 under the Investment Advisers Act of 1940, which governs the custody of client assets by registered investment advisers.

We oppose a specific part of the proposed change:

    A. Proposed Custody Definition Rule (c)(1)(ii); Deduction of Advisory Fees. Subparagraph (ii) states that custody includes:

    "Any arrangement (including a general power of attorney) under which you are authorized or permitted to withdraw client funds or securities maintained with a custodian upon your instruction to the custodian;"

We believe that payment of fees from client accounts should not constitute custody, provided that the client has authorized this means of payment, receives a timely copy of the bill showing the calculation, and receives a statement of account activity disclosing the payment.


Stephen D. Champion
Vice President
Global Trends Investments