Subject: File No. S7-11-04
From: Charles F Seip, ChFC, EA

March 16, 2004

The 2 5 day rule has no relation to actual transaction costs of the fund. In fact if active trading does not work as the fund families claim, then they should be making a profit on active traders rather than losing money.

The fund families encourage new money and have cash inflows every day as well as cash on hand. In most cases redemptions are handled with the available cash and there is no need to sell any securities. When securities do need to be sold to raise cash, most funds have certain underperforming issues in the portfolio they are ready to sell anyway.

Any fee should be related to actual cost and go to the other shareholders not the management firm. First though it needs to be shown that there is a actual negative impact to the fund by short term trading.