Subject: File No. S7-11-04
From: Michael C. Henkel
Affiliation: President, Ibbotson Associates

April 27, 2005

Ibbotson Associates appreciates the opportunity to express our opinion on the Commissions new rule 22c-2 regarding redemption fees. Based on the questions raised in the Request for Additional Comments section, Ibbotson Associates would like to make the following comments.

Share Accounting - Ibbotson believes that the FIFO method should continue to be used in determining redemption fees.

De Minimus Waivers - Ibbotson believes that redemption fees under a certain amount should be waived for investors.

Amount of Redemption Fees and Length of Holding Period - Ibbotson believes that both the level of the redemption fee and the length of the holding period should be set by a Funds Board of Directors.

Investor Initiated Transactions - Ibbotson believes that redemption fees should be charged for investor initiated transactions but not for transactions due to reinvestments of dividends or distributions or for rebalancing or discretionary management programs.

Our reasoning behind these positions is based on our experience and involvement with advice solutions that are increasingly being used for both qualified and non-qualified accounts. These advice solutions buy and hold mutual funds that are selected and managed to track various asset allocation portfolios. These advice portfolios are rebalanced regularly to change the weights assigned to funds based on style drift, under and over performance and to add or remove funds. Funds are added if the program changes and better fund options are available to the investor. Funds are removed if funds experience large periods of underperformance, benchmark or manager changes or there are regulatory issues with a fund. Any change to impose a required redemption fees penalizes investors in these programs that are seeking to do nothing more than invest the way most large institutional pension funds do. This seems like a grave injustice to long-term investors just to fight what we agree are the harmful affects of market timers. This is made worse by the fact that Ibbotson has modified its fund screening process to weed out funds where there appears to be timing activity going on as measured by large in-flows and out-flows to funds relative to their asset size. Our fear is that large redemption fees and/or long required holding periods not only make these programs difficult to implement but actually work to make it difficult for investors to leave poorly performing funds. We do not believe this is the intent of the Commission.

Ibbotson requests that the Commission leave rule 22c-2 as is and if any revisions are made that they are made as we suggest.