From: Sam C Bills [sbills@bellsouth.net]
Sent: Monday, May 10, 2004 11:29 AM
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 Secretary Katz:

I very much oppose the initiation of a 2% redemption fee for holding funds 
less than 5 days. There are many reasons that this hurts the small investor 
and benefits only the fund companies. The imposing of this fee is similar to 
imposing a tax on mutual fund investors. We don’t need more costs in mutual 
fund investing, but lower costs. The SEC has led the way in lowering costs of 
investing, and we do not want to reverse this process with the added fee. 

This fee will not eliminate abusive trading practices of a few, so we should 
not impose fees on the 90% of funds who do not have redemption fees since they 
have concluded that no problem exists. 

I believe that the added fee will lead to fund companies extending the fee to 
90 days, 120 days, 365 days, and even 2 years. This will hurt the mutual fund 
investor and cause them to have increased costs in investing in mutual funds.

The real short term trading of funds is due to stale pricing. This could be 
eliminated by fair value pricing in stopping the short term trading rather 
than the imposition of a fee. 

Funds presently have all the tools needed to stop abusive trading. All they 
need to do is use them to be effective. We do not need to penalize the 
investor in the process.



Very truly,


Sam C Bills
924 Scenic Dr
Knoxville, TN 37919