Subject: File No. S7-11-04
From: Eugene P. Saxby

May 17, 2004

Your recommendations to apply a 2 early redemption fee for a mutual fund held less than five days seems reasonable. This is not what the fund companies are applying today. Many of the fund companies where I have accounts are using 1 to 2 for a redemption of a fund held less than thirty 30 days. One has even applied an early redemption fee if the fund is held less than one year This does not reflect a solution to the problems described by you in correcting market timing. This is just using the problem to gouge the small investor and add to the income of the fund managers.
Please remember that this problem was caused by institutional traders in collaboration with fund managers, not the average investor.