Comment letter to SEC on Thrift Exemption

July 7, 2004 Securities and Exchange Commission 450 Fifth Street, NW Washington, D.C. 20549 Re: File Number S7-20-04: Proposal to Partially Exempt Thrift Institutions as Investment Advisers Dear Sir or Madam: 1 The Independent Community Bankers of America (ICBA) appreciates the opportunity to comment on the SEC’s proposal to partially exempt thrift institutions from the Investment Advisers Act of 1940 (the “Advisers Act”). Background The Advisers Act regulates the activities of “investment advisers” defined generally by section 202(a)(11) of the Advisers Act as persons whose regular business involves providing others with advice about securities for compensation. Under the Advisers Act, investment advisers must register with the SEC, fully disclose any material conflict that they have with their clients, provide their clients with an informational brochure, maintain records related to their activities, and submit to periodic examination by the SEC staff. Banks and bank holding companies are exempted from the definition of investment adviser by section 202(a)(11)(A) of the Advisers Act. The Advisers Act, however, contains no exceptions for thrifts or savings associations which, according to the SEC, should not be considered “banks.” Accordingly, thrifts that perform investment advisory services for their customers in connection with their trust operations generally are subject to the Advisers Act. ...