From: Sean Clemmons [sean@txcm.com]
Sent: Friday, May 07, 2004 1:54 PM
To: rule-comments@sec.gov
Subject: File No. S7-11-04

Jonathan G. Katz,
Secretary, Securities and Exchange Commission,
450 Fifth Street, NW
Washington, DC  20549-0609. 

Dear Sir,

This seems to be an over-reaction to the Mutual Fund after-hours trading 
scandal.  The problem with this ruling is that a mandatory redemptions fee is 
not necessary and will only hurt individual investors.  This means that 
individual investors would have less control over directing their own 
investments, and would then possibly result in the loss of value if investors 
were not able to sell their fund prior to market declines.

The SEC incorrectly labeled the illegal activities of mutual funds as 'market 
timing'.  Mutual funds already have 30, 60 and sometimes 90 day hold periods 
that they self-imposed on themselves by laws currently in place, and no 
additional legislative or governmental action is required.  What if, for 
example, you were given a recommendation to purchase a particular funds, but 
when purchasing that fund you made a mistake and bought the wrong fund.   
Currently, you would be able to immediately sell your incorrect purchase and 
then buy whatever your correct intention was, less whatever fees or 
restriction the mutual fund already had in place.  If the SEC ruling passes, 
you will be forced to pay a 2% fee to the fund company.

This proposed legislation is short-sighted, over-reactive, and just over-all 
bad for the individual investor, who the SEC is supposed to be protecting.

Thank you for your consideration,

Sean Clemmons 
Research Analyst
Texas Capital Management 
407-C, West Baker Road
Baytown, Texas 77521 
(281) 427-8000 - office
(281) 281-2796 - fax 
Texas Capital Management

Securities offered through Rydex Financial Services, a division of Rydex 
Distributors, Inc., member NASD/SIPC.

Rydex Financial Services, 9601 Blackwell Rd. Suite 500, Rockville, MD 20850.