From: technology.consultant@verizon.net
Sent: Tuesday, December 16, 2003 4:19 PM
To: rule-comments@sec.gov
Subject: File No. S7-27-03

I am concerned that your proposed method to deal with late-hour trading 
of mutual funds will place 401(k) plan investors at a serious disadvantage 
with respect to all other investors. I hope you realize that 401(k) plan 
investors constitute a large fraction of U.S. employees and voters.

I understand that under the proposed rule, 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, for example, that 401(k) plans 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 401(k) investors would 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. 

There are ways to prevent the problem of late trading in 401(k) plans (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.   

I hope that you will consider these deleterious effects of the proposed rule, 
and modify it to avoid them.

Sincerely,

Melvin L. Zwillenberg, Ph.D.
475 Richmond Avenue
Maplewood, NJ 07040