From: John Murray [djtm72@yahoo.com] Sent: Friday, January 16, 2004 5:58 PM To: rule-comments@sec.gov Subject: S7-27-03: To Whom It May Concern: I am a retiree with the majority of my lifetime savings in my 401K Plan. Your proposed rule will likely introduce an extra one day delay in my ability to move my savings out of equities and into a more conservative investment (e.g., a Money Market Fund) should I choose to do so in the event of a significant market downturn. This would place me and millions of other 401K Plan participants at a significant disadvantage compared to other investors. For example, on Friday, October 16, 1987, the Dow Jones Industrial Average fell 108 points (4.7%). That Friday many thousands of investors determined that the time was right to sell their equity positions. By doing so, they avoided the Monday, October 19, 1987 crash in which the Dow dropped another 508 points (22.6%). Please reconsider your proposed hard cut-off rule as it pertains to 401K Plans. I don't know if I will be fortunate or wise enough to avoid the next crash by moving my life savings to more conservative positions if the market drops significantly as it did on the Friday before the 1987 crash, but I and millions of other 401K Plan participants deserve the same opportunity other market participants have to react quickly to major financial market impacting world events. Please don't strip us of our ability to protect our life savings. My 401K Plan is managed by Fidelity Investments. The mechanized and manual controls in place will not allow "late trading." Any transfer request submitted after 4:00 PM EST becomes effective at 4:00 PM the next New York Stock Exchange trading day. I suspect that similar controls are in place for all major 401K Plans and for the vast majority of small 401K Plans. I propose this exception to your hard cutoff rule as it pertains to 401K Plans. Prior to the effective date of the rule, allow 401K Plans to be exempt from the rule provided they satisfy stringent certification requirements established by the SEC. To receive exemption from the hard cutoff rule and be permitted to process and send transactions to mutual funds after 4:00PM EST, a 401K Plan would be required to provide the SEC with a clear and convincing description of its mechanized and manual "time stamp" controls to prevent "late trading." This certification to the SEC would be from a 401K Plan Administrator's highest level of management authority and would require sign-off and concurrence from a reputable External Auditing Firm. The auditing firm would attest to the fact that they have audited the control process and found it to be adequate. If the SEC chooses to establish minimum "time stamp" control pro cess requirements, the certification would also specifically address and attest to the fact that such minimum requirements have been satisfied. Ongoing "time stamp" control processes would be subject at any time to SEC audit. The certification, including external audit review, would be repeated every 12 months in order for a 401K Plan to maintain exemption from the hard cutoff rule. Sincerely, John Murray -------------------------------------------------------------------------------- Do you Yahoo!? Yahoo! Hotjobs: Enter the "Signing Bonus" Sweepstakes