Comments of Guardian Mutual Funds on S7-40-02

November 26, 2002

VIA E-MAIL (rule-comments@sec.gov)

Mr. Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0609

Re: Proposed Rule regarding Financial Experts - File No. S7-40-02

Dear Mr. Katz:

We, as the Audit Committee of the Guardian Mutual Funds, feel compelled to comment on the proposed definition of financial expert.

We believe that the proposed definition is too narrow and the pool of available candidates is extremely limited. In our case, limiting the definition to "generally comparable issuers" limits eligible candidates to mutual fund CPAs.
The requirement to have an understanding of audit committee functions means many CFOs would not qualify.
Assuming we could find qualified financial experts, we are concerned that available candidates would not be interested for fear of increased liability exposure.
The current membership of our Audit Committee consists of members who are financially literate and able to read and understand mutual fund financial statements in a comprehensive way, although none of our members would qualify as a financial expert under the proposed rules.
The proposed definition would effectively require the Audit Committee to have at least one member with qualifications not required of the CEO or CFO. Given that the Audit Committee function is one of oversight and not preparation of financial statements, this seems illogical.
Although we understand from counsel that this is a disclosure rule, we believe that practically it will require us to have a financial expert that we fear will be impossible to engage.

Very truly yours,
Robert G. Smith, PhD
Chair, Audit Committee
Guardian Mutual Funds