Comment letter on File No. s7-09-05

Rule-comments@sec.gov December 6, 2005 Jonathan G. Katz, Secretary, Securities and Exchange Commission File Number S7-09-05 Reference to the Securities and Exchange Commission (SEC) release No. 34-52635: File S7-09-05 “Commission Guidance Regarding Client Commission Practices under Section 28(e) of the Securities Exchange Act of 1934___________________________________ Thank you for the opportunity to comment on the proposed changes outlined in your Release No. 34-52635: file S7-09-05 “Commission Guidance Regarding Client Commission Practices under Section 28(e) of the Securities Exchange Act of 1934 (the “Proposals”). The Proposals indeed clarify the scope of “brokerage and research services” in the context of current industry practices. This clarification together with the proposal for the equal treatment of bundled and independent research should address the growing concern that client funds are being improperly used by the industry and that the industry should be restructured so that money managers, rather than their clients, pay for research and brokerage. The Proposals recognize: • the value of research in making investment decisions; • the money manager’s responsibility to actively and continuously look for trades that will increase the value of the plan; • the principle that all research expenditures should add value to the portfolios; • the need to align the objectives of the money manager and their clients (plan ...