Via electronic mail October 10, 2002 Mr. Jonathan G. Katz 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:
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. Sincerely, Stephen D. Champion
|