Subject: File No. S7-06-04
From: Frank Dealy
April 7, 2005
I oppose any new rules or changes that offer just another layer of beaurocracy and of course another item for the NASD to put on their exam list and more documents to have to maintain.
25 years ago the SEC required customer s receive a prospectus.
The prospectus was revised to make reading it easier and simpler to understand
The result.........I bet no customer reads the prospectus.
As an RR I do use in house compliance forms already
- A prospectus receipt form
- A disclosure form for CDSC shares
- A disclosure form for Class A shares for ROA, Breakpoints etc but I rarely recommend A shares to customers with small amounts to invest
as I don't want them to immediately get their first statement and see their investment value has dropped by 5% as this doesn't go vary far
in reinforcing the success they can look forward to for a longer term, five or more years.
I just looked at the "Profile Plus" and almost broke out in a roll in the floor laugh.
What is the point...to get ever widow and orphan in common stocks through mutual funds?
If I am required to send something like that out I will also add:
What legitimate investment in the history of the world has lost $10 Trillion Dollars.
The only reason common stocks and the stock market exists is for executive stock options and to let rich people that own companies have a place to cash out.
As you know, the stock market runs on greed and fear and the "Profile Plus" will certainly help build up the "greed" factor.
Finally, investors are lazy and rich investors don't care about fees and expenses..........look at hedge funds.
The only group that is obsessed with fees and expenses is the SEC but then the SEC doesn't make any investments and now we all have Elliot Spitzler in NY
cleaning up America's securities and insurance markets.
Why doesn't anyone tell the regulators we need a moratorium on any further rules and they need to focus on enforcing current rules and regulations.
THERE IS A HUGE SCREW UP I WOULD LIKE THE SEC TO ADDRESSES.
AFTER PAYING A 5% SALES CHARGE OR GOING INTO A CDSC MUTUAL FUND SHARE, THE MUTUAL FUND INDUSTRY CHANGED THE RULES AND HAS DECIDED NOT TO ALLOW SMALL INVESTORS TO MAKE MORE THAN ONCE EXCHANGE IN A 30 DAY PERIOD.
THIS IS ABSURD AND I AM NOT TALKING ABOUT MUTUAL FUND DAY TRADING .
IF ON SEPTEMBER THE 10TH 2001 A PERSON WENT INTO EQUITY FUNDS AND THEN AT 8:30 ON SEPT 11 TRIED TO EXCHANGE TO A MONEY MARKET FUND
THE TRADE WOULD HAVE BEEN BLOCKED BY THE MUTUAL FUND COMPANY.
MY POINT IS, IF THE MUTUAL FUND INDUSTRY'S NEW POLICIES ARE ALLOWED TO STAND EVERY INVESTOR SHOULD BE ABLE TO GET ALL OF THE PRINCIPAL BACK AND CLOSE THE MUTUAL FUND ACCOUNT WITH OUT ANY EARLY SURRENDER CHARGE FOR CDSC SHARES OR THE COMMISSION THEY PAID WHEN BUYING FRONT LOAD FUNDS.
THESE NEW POLICIES ARE SELF SERVING TO THE MUTUAL FUND INDUSTRY, SOLELY
CASE IN POINT...MARCH 1, 25,000 SHARES IN A BOND FUND AT $12.60. I WAS NOT IN A POSITION WITH CONFIDENCE TO MOVE TO A MONEY MARKET AND BE FORCED TO SIT FOR 30 DAYS , PRIOR TO GREENSPAN'S FOMC MEETING ON INFLATION...RESULT MARKET LOSS OF $10,000.
NO BOND FUND MANAGER IS NOT IN A POSITION TO PRESERVE CAPITAL AND THERE IS NO WAY THEY CAN MOVE AROUND 10-50 BILLION PORTFOLIOS TO PRESERVE ANYTHING. THESE "PROFESSIONALS" ARE UP TO THEIR EARS IN GM PAPER I BET.
Once again, the problem with all the regulators they have totally forgotten.....the financial markets are a casino. While we all want the casino to be honest it is a fool
to forget it is a casino. We aren't required to sign a disclosure form when entering a casino that the house always wins.