These comments are submitted on behalf of the Corporation, Finance and Securities Law Section of the District of Columbia Bar (the "Section") and were prepared by a task force formed by the Section’s Committees on Corporate Governance and Accounting, Broker-Dealer Regulation and SEC Enforcement. The views expressed herein represent only those of the Section and not those of the D.C. Bar or its Board of Governors. The Section has many attorneys who routinely counsel issuers, and we respect and support the Commission’s ongoing efforts to promote the integrity of the capital markets.1 We appreciate the opportunity to submit our views on the Commission’s proposed standards of professional conduct for attorneys, proposed 17 C.F.R. Part 205.

We are particularly concerned that the proposed "noisy withdrawal" provision goes far beyond the plain language of Section 307 of the Sarbanes-Oxley Act of 2002 and, in our opinion, conflicts with sound public policy. We recommend that, at a minimum, the SEC defer the promulgation of this provision, and two other provisions, 2 that threaten to severely undermine the attorney-client privilege and the duty of confidentiality that attorneys have long owed their clients. Section 307 does not require the Commission to promulgate such far-reaching rules by January 26, 2003. Accordingly, we suggest that the Commission deliberate further before turning them into new law.

We also recommend that the Commission provide for a transition period before the proposed rules become effective. Even without the three provisions discussed above, Part 205 will impose substantial obligations on attorneys, many of whom do not view themselves as appearing and practicing before the Commission, and their supervisors. In addition, attorneys will need to develop, and provide to clients, appropriate disclosure regarding the limitations that Part 205 (as adopted) places on the ability of attorneys to represent clients zealously and to keep confidential the information that clients provide to the attorney. Accordingly, the Commission should allow time for the bar to understand the implications of Part 205 and to address Part 205’s requirements.

We recognize that the Commission’s work was driven by a directive from Congress as to the content of the proposed standards and the timing for their effectiveness. This comment letter is intended to focus attention on the broad implications and high social costs of the proposed standards of Part 205, but also to spell out a number of concerns with the clarity and workability of proposed Part 205.