From: Crouch, Richard F. [Richard.Crouch@pseg.com]
Sent: Thursday, December 18, 2003 3:50 PM
To: Lori Crouch (E-mail)
Subject: File No. S7-27-03


I am writing to express my concerns on proposed rules regarding the late day
trading of mutual funds. I am commenting as an individual 401(k) plan
participant as this is an issue with implications for my retirement savings.
I have been informed that the current process that allows certain people to
make trades after the close of the markets thus knowing in advance the
closing price of a mutual fund. Clearly, this is a serious issue as it
disadvantages me as a  typical investor who does not make such trades. 
It is my understanding that members of Congress and the Securities and
Exchange Commission are now attempting to correct this problem in a way that
will seriously disadvantage participants in 401(k) plans. I am a participant
in such a plan and I am counting on this plan as a supplement to my pension
(if that's not taken away by the time I'm ready to retire). Rather than
allowing thrift and savings 401(k) plans to accept transfers among funds up
until 4:00 PM each day, such transfers would have to be stopped well in
advance of the close of the markets so that all processing can be done and
the actual orders for trades can be placed in the hands of the mutual funds
by 4:00 PM. 
This means that my  plan could not accept transfers later than 10:00 AM or
11:00 AM each day. This is because all accounts have to be balanced, loans
processed, directions sent to the Trustee, etc. In effect I will be blacked
out from trading for several hours each day. 
These rules will place all 401(k) plan participants at a disadvantage to
other investors who will still be able to trade up the market closing time.
That is not fair!
I understand there are other ways to prevent the problem of late trading in
401(k) plans (by the way, no evidence has shown that this was actually a
problem in such plans), such as electronically stamping the time of
transfers, audits and stiff penalties for violating the rules, all of which
are acceptable ideas, but it seems unfair that 401(k) plan participants will
be prevented from trading mutual funds hours in advance of everyone else
simply by the nature of the record keeping process in such plans! 
rule-comments@sec.gov






Thank You 
Richard F. Crouch
Manager - Transmission Engineering
908-412-7010
908-412-0235 Fax




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