Subject: File No. S7-11-04
From: Joerg Schroeder

March 7, 2004

As a market participant I am strongly opposed to the
implementation of a 2 percent transaction fee on the following grounds:

1. The abuse that took place reportedly was mainly perpetrated by professionals.

2.The actual transaction fees are only a fraction
of the proposed fee.

3.Mutual funds trade substantial amounts daily for speculative purposes and portfolio adjustments. That must
represent multiple amounts relative to the abusing trades of the past. All clients bear those fees now. So where is the difference between those trades and a -law abiding- client who wants to adjust his/her porfolio in a timely fashion?

4.If the transaction fee is implemented, why should they not accrue to the benefit of all shareholders rather than for the account of the mutual fund firms?

5.If multiple weekly transactions cause increased expenses, why can these fees not be captured by a per ticket transaction charge, that reflects the actual cost? It is illogic that a trade done within a week should cost more than a trade done within 8 days.

6. If the existing rules to trade during permitted hours are properly observed, there is no need for additional fees. Fines for abuse should be significantly increased particularly over certain threshold amounts, which would discourage the institutional firms and hedgefunds, who were the main abusers of the rules in the first instance.

7. I understand that currently selective MF firms restrict clients from switching funds more than one time a month arbitrarily. In markets which fluctuate substantially, such self imposed restrictions clearly disadvantage MF investors. Such arbitrary restrictions should not be permitted by the Commission.

8. Mutual fund employees/executives should not be permitted to trade funds of their own firm.

In summary, the 2 percent fee seems to be nothing but a blatant fee increase by the MFunds, who would like to take advantage of clients who manage their holdings more pro-actively. It should be quite easy to calculate an average transaction cost and to reflect that cost as a per ticket item for those who prefer to adjust their holdings frequently. A 2 percent charge in that respect seems to be an anachronism into the re-alm of GVT sanctioned fixed commissions, at a time when transaction prices are coming down rapidly.

Disclosure: I have never engaged in any type of MF switching for myself or others and currently do not own any MFs.

99 Winding Brook Lane
Stamford, CT 06902-1011
203 967-2518

CC: AG Elliott Spitzer, The State of New York