SecProbe.io

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    Peter Schwartz.

    303.892.381

    peter.schwartz@dgslaw.com

August 1, 2023

Via EDGAR

Lauren Hamilton

U.S. Securities and Exchange Commission

Division of Investment Management,
Disclosure Review Office

3 World Financial Center

New York, NY 10281

Re: 	Second Response Letter
for the Annual Report of SCM Trust (File No. 811-05617) (the “Registrant” or the “Trust”) dated December 31, 2021,
as filed with the Commission on March 9, 2022 (Accession No. 0001398344-22-005537); and of the Prospectuses of the Registrant.

Dear Ms. Hamilton:

As you know, we are outside legal
counsel to the Trust and to the independent trustees of the Trust. This letter is the further written response of the Trust to comments
provided by the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the
“Commission” or the “SEC”) in telephone conversations with you and other members of the SEC Staff on May 4, 2022,
June 28, 2022, August 12, 2022, April 5, 2023 and June 1, 2023, regarding the above-referenced Annual Report and Prospectuses of various
series of the Trust. In the earlier calls, the Staff noted that, before providing these comments, the Staff had reviewed the two Prospectuses
of the Trust dated May 1, 2021, as supplemented., and subsequently filed Prospectuses dated May 1, 2022 (each, a “Current Prospectus”).
The Trust’s Chief Compliance Officer, Gregory Pusch, previously submitted draft response letters to the Staff on June 29, 2022 and
August 24, 2022. It bears noting that, because the Staff had not provided any reaction to the August 24, 2022, draft response until your
telephone call on April 5, 2023, the Registrant erroneously assumed that the Staff believed that the August 24 draft letter adequately
responded to the Staff’s comments.

In the April 5, 2023, telephone conversation
with Mr. Pusch and Andrea Reidle of Shelton Capital Management (the “Adviser”), however, you provided additional comments
on the Trust’s response to your prior Comment 6, as enumerated in the Registrant’s August 24, 2022, draft response letter.
After considering those further comments, the Board of Trustees (the “Board”) met on two occasions with outside counsel for
the Trust to discuss the appropriate response to the new Staff comments. After review, comment and approval of the draft response letter
by the Board, the Registrant filed it in final form via EDGAR on May 9, 2023. The May 9 response letter from the Trust’s Chief
Compliance Officer included final responses to Staff Comments 1 through 5 and 7 through 13, along with a revised response to Comment
6, which response was expanded by an Annex specifically addressing the 9 new comments made on April 5.

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    August 1, 2023

Lauren Hamilton

You and Valerie Lithotomos subsequently
telephoned Ms. Reidle to indicate that the Staff disagreed with the Trust’s response to Comment 6, including the Annex, and wished
to schedule a conference call that would include your respective Branch Chiefs as well as outside counsel for the Trust. That call was
held on June 1, 2023, and included Valerie Lithotomos, John Lee and Jacob Sandoval from the Staff and outside counsel to the Trust, namely
the undersigned and Lee Terry of Davis Graham & Stubbs LLP, along with Mr. Pusch and Ms. Reidle1.
After the participants explained their respective positions but nevertheless failed to reach an agreement, the Staff asked the Registrant
to submit a further written response to Staff Comment No. 6 and the Annex, including, if appropriate, documentation supporting the Registrant’s
position that was referenced in, but not provided with, the Trust’s May 9, 2023 response letter.

As you know, Comment 6 and the additional
Staff comments described in the Annex to the May 9 letter all relate to the annually renewed Expense Limitation Agreement (“ELA”)
between the Adviser and the Trust on behalf of the Shelton Tactical Credit Fund (the “Fund”). In particular, the Staff’s
initial Comment 6 questioned why, if the Notes to the Financial Statements of the Fund disclosed a contractual expense limitation of 1.39%
and 1.64% for its Institutional Shares and Investor Shares, respectively, the financial highlights in the text show expense ratios after
expense reimbursements of 2.04% and 2.31%, for those share classes, respectively.

In prior discussions and the May 9
response letter, the Registrant has explained why there is a difference between the expense ratio after expense reimbursement and the
contractual expense limitation ratio in the ELA (the “Delta”). The Staff’s position has been that, for the periods of
time when the parenthetical language in the ELAs excluding certain items from the Adviser’s reimbursement obligation (the “Carveout”)
used general language and only a limited number of examples instead of a list specifying all excluded items, the Adviser should be required
to pay the dollar amounts represented by the Delta to the Fund as purportedly unreimbursed expenses under the ELA. The Registrant continues
to disagree with the Staff’s position in this regard.

Investment Expenses Were Never
Capped by the ELAs

As explained in our May 9 response
letter, for purposes of the ELA, the Fund, its independent accountants and the Adviser have historically treated each of (i) interest
expenses incurred relating to short positions in the Fund’s investment portfolio, (ii) broker’s fees relating to the Fund’s
investment portfolio, and (iii) excise taxes paid in connection with the Fund’s short trading strategy (collectively, “Investment
Expenses”) as falling outside of the category of “operating expenses” that are capped by the ELA. This distinction
rests on a number of different grounds, including the unusual types of expenses incurred by the Fund while executing its short selling
strategy.

1
Besides serving as CCO of the Trust, Mr. Pusch is also General Counsel and CCO
of the Adviser.

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    August 1, 2023

Lauren Hamilton

There are several reasons why the
Trust believes that the parties’ consistent interpretation of the various ELAs is both reasonable and appropriate under the circumstances.

Form N-1A—"Transaction
Costs, Such as Commissions”

The text of Form N-1A in Item 3,
Risk/Return Summary: Fee Table under Portfolio Turnover, provides:

“The Fund pays transaction costs,
such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which
are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance” (emphasis supplied).

While
most of the Fund’s Investment Expenses are not commissions per se, in the special circumstances of the Fund and its short
selling strategy with respect to individual credits, they are together the functional equivalent, i.e., “transaction costs, such
as commissions” referenced in Form N-1A. In an abundance of caution,
however, the Fund has always included all Investment Expenses in the Fee Table, albeit separately identifying most of them as “Dividend
and interest expense on short sales” in order to highlight the close resemblance of these Investment Expenses to commissions and
markups paid by other funds that are not reported in their Fee Tables.2

For example, some funds, typically those larger than
the Fund, have access to credit default swaps (“CDSs”), which achieve the identical economic outcome as the Fund achieves
by directly borrowing a bond and selling it short. CDSs are generally exchange cleared, and the costs of entering into the trade include
interest accrued on the CDS over the period it has been borrowed plus any brokerage fees for providing the borrowed security, but those
underlying costs are not broken out separately. For a CDS, the interest is expressed as a coupon paid, and the trading costs of exchange
traded CDS are recorded directly into the fund ledger’s “gains and losses.” While the same costs are incurred indirectly,
they do not appear in the Fee Table as they do for the Fund.

By contrast, the Fund accomplishes the same shorting
strategy by directly borrowing a bond and selling it short. However, the costs of the trade, including the interest accrued on the bond
over the period it has been borrowed plus any brokerage fees paid for providing the borrowed security are recorded in the general ledger
of the Fund as actual expenses.

2
See, e.g., the Fee Table in the Fund’s June 27, 2019, Supplement to its
May 1, 2019 Prospectus, in which it discloses that 3.56% of its total of 3.92% in Other expenses is comprised of Dividend and interest
expense on short sales.

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    August 1, 2023

Lauren Hamilton

This results in the inclusion of these costs in the
Fee Table, rather than being reported only as part of trading gains or losses as they are when CDSs are used.3

Form N-1A—Adequacy of
the General Carveout Language

The Staff has suggested that, because
the Fund discloses in the footnote to the Fee Table only the actual language of the Carveout from the ELA, which is general and not comprehensive,
rather than replacing the contractual language with a list specifying every excluded expense, the disclosure is confusing. The Staff has
asserted that this confusion requires the Adviser to reimburse the Fund for the Delta for all periods during which the general form of
the Carveout from the ELA was disclosed in the footnote to the Fee Table. Even if one assumes that Investment Expenses need to be included
in the Carveout to be excluded from the ELA, which the Trust does not concede, the Staff’s assertion is not supported by Form N-1A.

There is no mandate in Form N-1A that
all of the expenses covered by a Carveout be comprehensively listed, as opposed to the more general, open ended, language used by the
Fund. In fact, Instruction 3(e) to Form N-1A provides:

“If there are expense reimbursement
or fee waiver arrangements that will reduce any Fund operating expenses for no less than one year from the effective date of the Fund’s
registration statement, a Fund may add two captions to the table: one caption showing the amount of the expense reimbursement or fee waiver,
and a second caption showing the Fund’s net expenses after subtracting the fee reimbursement or expense waiver from the total fund
operating expenses. The Fund should place these additional captions directly below the “Total Annual Fund Operating Expenses”
caption of the table and should use appropriate descriptive captions, such as “Fee Waiver [and/or Expense Reimbursement]”
and “Total Annual Fund Operating Expenses After Fee Waiver [and/or Expense Reimbursement],” respectively. If the Fund provides
this disclosure, also disclose the period for which the expense reimbursement or fee waiver arrangement is expected to continue, including
the expected termination date, and briefly describe who can terminate the arrangement and under what circumstances.”

This Instruction, which specifically
prescribes the disclosure requirements of the footnote to the Fee Table on the ELA, calls out a number of specific topics for disclosure,
such as the timing of the ELA and its termination rights, but is silent on any need to disclose each specific item covered by or excluded
from the ELA.4

3
The unintended consequence of these disparate Fee Table requirements can be to
mislead investors into believing that the funds using CDSs to effect a shorting strategy are incurring lower total expenses than the funds
that actually effect short trades, who must show these Investment Expenses in the Fee Table. That disparity can provide an unwarranted
competitive marketing advantage to funds with access to CDS markets. Investors can mistakenly believe that, by selecting a fund that uses
CDSs for shorting, they are getting a fund with significantly lower expenses, when that may not be the case.

4
The focus on these topics as being
the especially important disclosure items for investors was reiterated in the recent Commission release on Tailored Shareholder Reports
for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements, Investment Company Act Release No. S7-09-20.
See p. 182 and fn. 548 & 549, which again focus on disclosure of ELA termination dates, but say nothing about mandating disclosure
of other terms of the ELA.

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    August 1, 2023

Lauren Hamilton

The Commercial Realities of
the Staff’s Position

Because of the Fund’s short
sales investment strategy, Investment Expenses vary considerably from year to year and often dwarfed ordinary operating expenses. As discussed
at length in the June 1 conference call, it is therefore commercially unrealistic for the Trust to claim the Adviser has a contractual
obligation to reimburse all Investment Expenses of the Fund for the period of time that, in the Staff’s view, the Carveout was too
general and too broadly phrased to exclude them. Applying the Staff’s views on the proper interpretation of the ELA would lead to
commercially untenable results, which further bolsters the parties’ understanding that the ELA was never intended to cover Investment
Expenses.

To illustrate how commercially unrealistic
it would be to accept the Staff’s position on Investment Expenses, the Staff should consider the following numbers.

During 2020, the Fund incurred $1,157,273
in Investment Expenses while the management fee paid to the Adviser, net of reimbursements made under the ELA as interpreted by the parties,
was $636,911, a difference of $520,362. In other words, the Staff is suggesting that the Fund should require the Adviser to pay the Fund
$520,362 for serving as the Fund’s investment adviser and manager in 2020. The Adviser’s losses would be even greater than
that amount, however, since it would have to incur the costs of providing the advisory and managerial services even while assuming the
risk of potential liabilities arising from such services.

Accepting the Staff’s view for
the year 2019, which is complicated by the combination of the Fund with and into another fund, would likewise require the Adviser to make
a net payment to the Fund for that year. In 2019, there were $1,035,331 in Investment Expenses for the entire year, as compared to management
fees net of reimbursements of $975,829. Thus, if the Staff’s interpretation were to be accepted for 2019, the Adviser would be required
to pay the Fund $59,502 even while assuming the costs and risks of liability attendant to serving as manager and investment adviser that
year.

For the five year period 2018 to 2022,
most of which is arguably covered by the Staff’s comment proposing reimbursement, total Investment Expenses were $2,646,965, while
total management fees net of reimbursements were $2,920,484. In other words, acceptance of the Staff’s position would result in
net management fees to the Adviser of $273,519 over the five-year period, or $54,704 per year. In fact, however, because there were no
Investment Expenses in 2018, the net profit to the Adviser over the four year period 2019 to 2022 would come out much worse. The total
management fees net of reimbursements for 2019 through 2022 were $2,569,472, minus Investment Expenses of $2,646,965, resulting in a net
obligation of the Adviser to the Fund of $77,493 for those four years, or $19,373 per year, in addition to its costs for providing those
services.

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    August 1, 2023

Lauren Hamilton

Each year, when the Trust and the
Adviser renewed the investment advisory agreement for the Fund and the related ELA, neither party contemplated any of these numbers. In
fact, the history of the parties’ relationship suggests the opposite.

The Consistent History of the
ELA and the Carveout

Notwithstanding the intended meaning
of “operating expenses” in the ELAs, the Staff has been almost entirely focused on the language of the C