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Mr. Jonathan G. Katz Securitiesand Exchange Commission March 12,2004

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content might be is best left to individual advisers to address in the context of their own businesses. Including such provisions in the Proposed Rule would also be inconsistentwith the approachtaken by the Commissionin Rule 17j-1Accordingly, NSCP does not support their inclusion in the Proposed Rule. 10. Recordkeeping

The Commission has requested comment on its understanding that requiring records to be kept in electronic format would not be burdensome.

Contrary to the Commission's assertion, the experienceof NSCP members is that the development and maintenance of electronic systems for tracking personal securitiestransactions by employeesis difficult, time consuming and expensive. Many NSCP members that have attempted to implement electronicrecordkeeping systems report that significantmanual interventionis required in order to create useful records and maintain the systems. While electronicrecordkeeping is desirable, the technology is not so sufficientlydeveloped that it should be imposed by regulatory fiat.

Moreover, this aspect of the Proposed Rule that could have a potentially disparate impact on smallerinvestmentadvisers registered with the Commission. NSCP understands that a majority of the more than 8,000 federallyregistered investment advisers are relatively small. Imposing on them the requirement of maintaining electronicallyin accessible computer database records of accesspersons' personal securitiesreports as well as duplicatebrokerage confirmationsor account statementsin lieu of those reports will disproportionatelyaffect such smalleradvisers with limited resources or expertiseto implement such systems.

In the absence of any assertion by the Commission that current recordkeeping systems are impractical or themselves subject to abuse, NSCP strongly opposes the inclusion in the Proposed Rule of any requirement concerning the form in which records should be kept. 11.Content of Holding Reports

Section (b)(l)(i)(A) of the Proposed Rule specifiesholdings reports by Access Persons include the CUSIP number of each reportable security in which the access person has any direct or indirect beneficial ownership. Security identificationcodes significantlyassist in monitoring and review compliance with transactions subjectto a code of ethics, and NSCP supports their inclusion in the Proposed Rule. However, certain securities(especially securitiesof companies issued and traded outside the United States) do not have a CUSIP number but instead use a SEDOL, ISIN or similar identifier. In addition, certain markets do not utilize individualized alphanumeric securities codes. In recognition of this fact, NSCP suggests that the Proposed Rule be amended to require the recordation of an alphanumeric code (such as a CUSIP, SEDOL or ISIN) where available.

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