From: james_nesfield@nesfieldcapital.com
Sent: Wednesday, July 02, 2003 8:30 PM
To: rule-comments@sec.gov
Subject: (S7-10-03) Notice of Solicitation of Public Views Regarding
Possible Changes to the Proxy Rules

I support SEC Chairman Donaldson's recently announced decision to conduct a 
comprehensive review of the proxy rules under Section 14 of the SEC Act of 
1934, which governs shareholder access to the proxy statement and ballot. There 
are however the overriding issues of an antiquated system deployed now by the 
industry to approximate the holders via various layers of sub accounting 
entitled to such information and the cumbersome techniques used to aggregate 
and total the votes.   The first issue to be determined is who is able to vote 
on the proxies is it the holder of a mutual fund share held in a pension 
account, a direct holder held in their name, or an investor holding the shares 
in an Omnibus fashion at a Depository Trust(DTC) Participant Account?  This 
situation of indentity screams for an answer and who is entitled based on that 
identity.  Now once those issues have been determined in a fair and just manner 
the horse and buggy methodologies deployed by DTC in to be addressed.   The 
collection and distribution of information to shareholders lacks automation and 
verification rendering the rights of shareholders vessels of empty promises.   
I propose that a Utility for the Industry be constructed to preform this task 
of distribution of proxy material and gathering the votes using the Internet.  
Since the omnipresent network is fairly well deployed shareholders could be 
issued digital identities in a real time fashion based on trade date 
information which is used to determine the record date.  Shareholders that have 
accounts at DTC Participants and own shares via a sub accounting regime could 
vote and receive information using a common interface once the ind entity of 
the 
shareholder is authenticated and established.   The issue of pension holders 
voting using this scenario would allow each pension holder to vote as they 
choose to and not delegate that to managers of the pension funds thereby 
removing the political aspects from the system as the AFL/CIO have promoted.  
The issue of mutual fund managers having the power to vote proxies could also 
be removed via a shareholder registry of authenticated shareholders of the 
particular funds owned by the investors.  By removing the two major parties 
that have prompted this expensive debate at the cost to the American Consumer a 
clear path to actually serving the interest of the American Investor and 
shareholders in general.   By causing this debate the Mutual Fund Industry and 
the Organized Labor folks have revealed a level of greed not known before in 
history.  The use and abuse of other peoples money must stop.
I have found a system that can provide the protect to the investor that is cost 
effective and functions in a real time environment that way the actual 
shareholders wishes are carried out not George Meany or Ned Johnson's.  Please 
look at www.webfunds.org this application designed by Ian Grigg allows for the 
authentication of shareholders verification of delivery of proxy material and 
the counting of votes and the reporting to the board of directors of public 
companies the true wishes of the shareholders they serve.   Fractional shares 
for indirect holders like those found in Mutual Funds can be offered the same 
privilege those that own directly are afforded.   A public mandate for 
democratic representation of shareholders to its board is at hand and can 
modernize all aspects of corporate governance removing forever from the dark 
ages of despair and lack of accountability it now suffers from.