Subject: File No. 4-606
From: Paul D Lofton

August 29, 2010

Paul D. Lofton
5014 E. 110th Ave
Tampa Florida 33617
August 29, 2010
Comments Attached:

Dear SEC Rules Committee,

401K Mutual Funds Rules Change Request.
We, mutual fund owners should have more control over our money, more say and more policy making input with regard to the funds that have been placed into 401k accounts. The Securitys and Exchange Commission along with Congress should mandate that 401k investors have maximum control and flexibility with their money and investment choices. Moreover, no investor should ever be handcuffed and be made to stay in the market by mutual fund minimum time invested rules, while others (traders and private investors) have full freedom to move about in a free and open stock market. To me, this is a form of financial jail. You cant trade. You are in jail, due to the time restrictions placed on your account. The following are rules changes that must be put into place to afford investors flexibility and safety of principle.

I am advocating that the following rules changes for 401k Mutual fund participants.

1. All 401k plans to be placed in an employees Self Directed 401k Brokerage Account of the employees choosing. Company matching funds could then be payroll deducted and sent to the account just like payroll deductions and automatic deposits occur now.

2. All 401k plans to be owned by the employee and be portable, in the event the employee moves to different employers.

3. Make full brokerage capabilities available to all 401k-plan participants through the use of self-directed 401k brokerage accounts. This would allow 401k participants to own individual stocks of their choosing instead of the very limited choice of funds currently available to most plan participants.

4. Make all mutual funds mark to the market its net asset valve twice per day during the hours the market is open, thus making intra day purchases and redemption's possible to all who choose or need to do so. The present system of determining a funds net asset value just once at the end of the day, after the market close, is archaic and outdated. With our current computing capabilities, all pricing possibilities and times are possible.

5. Make unlimited trading of mutual funds legal and possible for all who wish to do so. Or if not this, then allow investors to use exchange-traded funds in brokerage accounts in place of mutual funds.

6. Mandate that all 401k accounts have the SP 500 spyder symbol SPY, the Diamonds Trust symbol DIA and the triple QQQ available for use by everyone. These are essential basic investment choices that need to be available to all 401k investors.

7. Make it law that companies reporting earnings must do so during the business day while the stock market is in full session. Thereby giving all market participants the same opportunity to respond to the news in a way of his or her, own choosing.

8. Legalize late and early trading of mutual funds. If companies can announce earnings after the market closes, and stock trading can occur after the market closes, then late trading of mutual funds should be both legal and allowed by every mutual fund and 401k investor. The Securities and Exchange Commission should either allow late trading of mutual funds, or make the market stay open until 7:00pm (this is when after hour market trading stops), or shut down all market related activities (including the announcing of earnings by all companies) at 4:00pm. Hey, come on, whats fair is fair. Currently, theres not anything that is fair about the way all these aspects and activities are being conducted. The mutual fund investor is getting the short end of the deal. Investors should be able to trade a mutual fund and get the market close for that day, all the way up to 7:00pm. This makes perfect sense. Especially since most employers do not want or even allow the employees time to perform personal business on company time.

9. Change the hours of operation for the New York Stock Exchange. Again you talk about being the Stone Age The NYSE currently opens at 9:30am and closes at 4:00pm. The day is half over by the time they open. Most every American citizen is at work well before the market opens and well after wards. Whats up with that? Why cant the market open at say 7:00am and close at 5:00pm like the rest of the working world. Are they so privileged? Again the major exchange is out of sync with the rest of America and the investing public. I propose that the market hours of operation be 7:00am through 5:00pm. Then have a morning session that marks everything to the market at 12:00pm. The hours between 7:00am and 12:00pm would be the morning session. Mutual funds would be priced at 12:00 noon prices and again at the close of 5:00pm. Then a second session would begin at 12:00noon and run until 5:00 pm, at which time all equities would be marked to the market and all mutual funds would have a second or final closing price for publishing in the press as of 5:00pm. The reports would provide two net asset values for the day. One for the morning session and one for the afternoon session. This is not that hard. This would afford mutual fund investors some of the same flexibility that the rest of the investing public has. We have got to get out of the Stone Age when it comes to mutual fund investing. The NYSE has got to come around to a modern way of serving all of its customers.

10. Require that mutual fund companies offer a fund designed for active traders who wish to actively manager their money and time the market.

11. The Securities and Exchange Commission must abolish the time invested rules that are imposed by most mutual funds. These severe restrictions keep investors invested in the market against their will during times of turmoil in the market. Most mutual fund companies require that investors be invested for a minimum of 90 days. Hell, in 90 days an investor can be wiped out. Remember October 1987? Remember September of 2001? Mutual fund investors were wiped out. Please make it legal for investors to move in and out of mutual funds at will at any time.

In Summary
When the next selling avalanche occurs (and it will), current mutual fund investors will be left holding the losses once again. Mutual fund owners will not be able to get out of the way of a sell off when it happens. It will be just like all the times before. The mutual fund investor can count on getting hurt if the changes that I've outlined above are not brought about. Its like we the investors, have been tied to a set of railroad tracks with a train fast approaching. For most of us, we will be forced to endure being run over by a speeding train. Is this fair? The mutual fund companies would like you to believe it is. They want you to stay the course and be patient. Never mind that every other market participant was able to trade out his or her stocks in a free manner in a free and open market. But you, because youre invested in mutual fund are destined to get crushed by a falling market. You who have invested in mutual funds must now play the waiting game for several years to recoup the losses of the past decade. I dont think this is fair or just. In fact, I think investment advisers and brokers have done a huge disservice to the investing public. They certainly havent had a modern thought in ages. I believe Americans deserve the ability and the rights to have the same timing flexibility as stock traders enjoy. Why do mutual fund managers encourage their clients to stay fully invested during times when the market is heading into the toilet? Why would any mutual fund manager handcuff an investor to the market and make them experience all the market gyrations against their will? This is investor cruelty. I liken it unto being held against my will. You the Securities and Exchange Commission must abolish the time invested rules that are imposed by most mutual funds. These severe restrictions keep investors invested in the market against their will during times of turmoil in the market.

Best regards,
Paul Lofton
5014 E. 110th Ave,
Tampa Florida 33617