From: Michael Dougherty [mjdough@comcast.net]
Sent: Friday, May 07, 2004 3:28 PM
To: rule-comments@sec.gov
Subject: File No. S7-11-04

Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 Fifth Street, NW, Washington, DC  20549-0609.

Dear Mr. Katz,

I am an investment advisor from Denver, Colorado.  I've been an advisor for 
over 20 years.  I have never sent in an email letter to the SEC before, but I 
am doing so now because I believe the issue is serious enough and I'd like my 
voice heard.  I am writing to let you know that I object to the SEC's proposal 
for a 2% mandatory redemption charge to investors who sell their mutual funds 
with 5 days of purchase.

I know this issue has begun with the abusive trading practices of many mutual 
funds, but a mandatory redemption fee will only hurt the small investor.  
Currently, most mutual funds now have no such fees, and therefore would seem 
to have no abusive trading problems.  If they did, they could easily control 
it themselves with the tools they now have.

Furthermore, this fee, if imposed,  will be "the foot in the door" for many 
mutual funds to raise their fees in the future by just extending the minimum 
holding period from 5 days to 30, 60 or even 90 days...all the expense of the 
individual investor!  There would be no competitive pressure within the mutual 
fund industry not to do so.  Also, isn't this just like another tax?  The SEC 
for years has been an advocate for the individual investor and for keeping 
their costs down, but this proposal seems to contradict that advocacy.  

Clearly another solution needs to found to curb abusive trading, but only 
where it exists.  Currently, funds do have all the tools they need to control 
abusive trade, and many are controlling that on their own.  So why does the 
government need to get involved, and raise costs for everyone?  I encourage 
you to not enact a 2% penalty on mutual fund transactions unit 5 days!  In the 
end, we will all be the loser.

Sincerely,

Michael J. Dougherty
Branch Manager
LPL Financial Services
4600 South Ulster St.
Denver, CO.  80237

303-740-6605