From: Will Hepburn - Cable One [whepburn@cableone.net] Sent: Wednesday, April 21, 2004 12:56 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 believe the proposed mandating of a 2% redemption fee for mutual funds is exactly the wrong reaction to the mutual fund's abusive trading problems that the Commission is working on. It will serve to reward the violators of the public trust by giving them another revenue stream. I hope that the fact that a powerful lobby, the ICI, is steering the process will not allow this point to be obscured, because this is a big issue, fundamental to the integrity you are trying to restore to the mutual fund industry. Do not reward the offenders! As fiduciaries, the metal fund companies should not be allowed to charge their own shareholders - and those who will be asked to pay the redemption charge are, in fact, shareholders - more than the actual costs of a liquidation. I am not aware of any valid studies that show that 2% is anywhere related to the reality of the situation. The studies I have seen indicate that 10 basis points is the top end of true costs of short term redemptions. Often there is zero cost. The one exception to this cost of redemption issue might be international funds or others subject to stale pricing. I believe fair value pricing is a more equitable than mandatory redemption fees as away to deal with the potential for arbitrage of stale pricing. The SEC has always pushed for efficiency and low costs for the investment consumer. To impose a 2% "tax" that burdens individual investors and benefits the financial institutions goes against everything the SEC has historically been for, especially when it is not a productive move at all. Thank you for your hard work on this issue and for allowing me to have some input. Will Hepburn, CFP 805 Whipple St, Suite C, Prescott, AZ 86301 Voice 928.717.0007, Toll Free 800.778.4610 email Will@Hepburn.com, Fax 928.778.0085 The information in this email is confidential and is intended solely for the addressee. If you are not the intended addressee and have received this email in error, please reply to the sender to inform them of this fact. Any disclosure, copying, distribution or any action taken in reliance on information contained herein, is prohibited and may be unlawful by anyone other than the legally intended recipient. We cannot accept trade orders through e-mail. Important letters, e-mail, or fax messages should be confirmed by calling (928) 778-4000. This email service may not be monitored every day, or after normal business hours. Advisory Services offered through Hepburn Capital Management, LLC, a Registered Investment Advisor.