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Mr. Jonathan G. Katz Securities and Exchange Commission March 12,2004

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believes that the emphasis should be on the seriousness with which risks are addressed and on the appropriatenessof the practices employed, not on ritualistic formulations. 3. Coordination with Section 17j-I of the CompanyAct

As noted above, NSCP believes that the requirements of advisers under the Proposed Rule and Rule 17j-1 under the Company Act should be, as nearly as practical, identical. Accordingly,NSCP urges the Commission to make parallel changes to Rule 17j-1 in the event that it should adopt Rule 204A-I with changes fiom the Proposed Rule. For example, the types of securitiessubject to Rule 17j-1 (a "Covered Security") and the Proposed Rule (a "Reportable Security") should be co-extensive.14Similarly, the standards for determining whether a specific individual is covered by the Proposed Rule (an "Access Person") and Rule 17j-I ("Advisory Person") should be determined by reference to the same factors.15 4. Definition of Access Persons

NSCP supports the definition of Access Persons as set forth in (e)(l)(i) of the Proposed Rule, and does not support the extension of the definition to include persons who are not supervisedpersons as defined in Section 202(a)(25) of the Advisers Act. By definition, these individuals are not under the supervision and control of the adviser, and the adviser will not, consequently, be in a position to require such persons to adhere to the requirements of its code of ethics or enforce compliance. Moreover, non-supervised persons who have accessto confidential client information, such as broker-dealers and custodian banks, are already subject to similar requirements. Requiring advisers to provide additional supervision of such persons would, therefore, add little protection, but would be unduly burdensome to advisers and unnecessarily increase clients' costs. 5. Application to Directors, Oflxers and Partners

With respect to that portion of the definition of Access Person contained in Section (e)(l)(ii) of the Proposed Rule, NSCP believes that there is a continuing need to provide an exemption fiom both Rule 17j-1 and the Proposed Rule for officers and directors who, due to the nature of the business of the adviser do not, in fact, have accessto the type of information that both rules protect. The current exemption from Rule 17j-1excludes those whose primary business is not advising funds or clients. NSCP believes that this exemption works well for large or integrated financial services companies, such as banks and insurance companiesthat happen to provide investment advice as an adjunct to their main business. However, such a test does not work well for groups of advisers organized as subsidiaries of financial holding companies, especially when a financialholding company holds advisory subsidiaries (or participates injoint ventures) formed under the laws of multiple nations.

NSCP believes that the concerns of both types of businesses could be more adequately addressedthrough the creation of a legal presumption that directors, officers and partners are

14 The Proposed Rule would exclude money market funds f?om the definitionof Reportable Security, while no such exemption currently exists under Rule 17j-I . See, Rule 17j-l(ax4). I5 The ProposedRule focuses on whether a supervisedperson, in fact, has or has access to confidential information (see, ProposedRule 204A-l(e)(l)(i)(A) contained in Release 2209), while Rule 17j-1 relates only to supervisedpersons "who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Fund."Rule 17j-l(a)(7)(i).

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