Subject: File No. S7-17-11
From: Molly Huntsman

June 23, 2011

To say this has not cost is not true.

This change would have a heavy cost on small hedge funds like the one I run. Simultaneously raising the limit from $1.5 to $2.0 while excluding the value of one's primary residence is a huge jump the actual net worth test. This will severely shrink the pool of investors I can raise capital from. My small hedge fund has excellent returns but cannot survive without performance allocation fees because the assets under mangement are so small. The funds current investor happily pay these fees because even with them they have made better returns than they would have with a big mutual fund provided from the big wall street firms.

This rule change is punitive and will put small hedge funds out of business because of the high new cost and difficulty in raising new capital.

It will also have a high cost on the small investor who wants to invest their money in a hedge fund with the best manager they can find but will now be turned away by many hedge fund managers and won't be allowed to invest because they are no longer allowed to pay the performance fees if their net worth falls below the new proposed $2.0M standard.

So please don't hurt small businesses and investors by making this dramatic change so quickly. Please reduce the amount you increase the net worth standard by to something more reasonable like $1.5 increasing to $1.6M. Please don't exclude a person's primary residence from the calculation. This is not required by the Dodd-Frank act so definitely do not do it.

Please help small businesses by using this as an opportunity to create a new exception like having allowing investors who have been sophisticated enough to trade equities on their own in the past be allowed to invest in hedge funds and pay the performance fee regardless if their net worth falls below any arbitrary value. The commission should be trying to help real sophisticated investors by giving them access to more hedge fund management talent not less. Let the investor decide who they want to invest with or not and do not arbitrarily exclude them just becuase they happen to own a home and their net worth falls below $2.0M.

Finally, please do "grandfather" in existing clients and allow them to continue with the agreement they had with their financial advisor before this rule change. If this is not done then it will be the death nail for my business because the cost of this change will be way too high for me to bear and I will become unemployed like many other Americans in our stuggling economy.

Thank you for taking the time to consider my comments.