Subject: File No. S7-06-04
From: Michael R Burr

February 11, 2004

While not really big investors, my wife and I do have about 400,000 of our retirement funds 403b IRAs, etc. in various mutual funds, so this proposed rule affects us.

Since the larger a fund grows, the less nimble it can be, and the more difficult it becomes to find suitable investments, it seems an absurd conflict to force investors to pay for marketing and promotion of the fund -- so it can grow larger, and thus less efficient.

The only people benefiting from such fund growth are the managers, advisors and brokers who make money from fees and commissions, which obviously increase as funds grow.

So let the people who profit pay for their own marketing, rather than passing those costs on to shareholders, with obscure and dense jargon passing for disclosure.

The rule as proposed does not go far enough to protect mutual fund shareholders, who tend to be less sophisticated than active investors, and thus need greater protection.

Any acceptable rule would require that all marketing and promotional costs be born by the entities ultimately benefiting from such promotion, and pass-through fees should be prohibited.

Shareholders should pay clearly disclosed management fees, arms-length commissions on trades, other direct expenses prospectuses, reports to shareholders, account maintenance fees, etc and thats it. These fees should be clearly disclosed to shareholders at least twice a year, preferably quarterly, in both percentage terms and a specific dollar-and-cents figure, based on each individuals holdings. It might also be helpful if shareholders are somehow shown how significantly the fees impact performance: e.g., these fees reduced your quarterly gains or increased your quarterly losses by such-and-such percent.

Only transparant fees and clear disclosure will allow the marketplace to fairly compete, with fees and their relationship to performance capable of true evaluation and comparison by investors.