From: Rod & Pat [rodney@brazosnet.com] Sent: Thursday, December 04, 2003 6:06 PM To: rule-comments@sec.gov Subject: rule comments (s7-26-03 and S7-27-03) I have been reading with interest about the mutual fund "scandals" and about proposed rule changes. As a small investor, I know what I think isn't worth much but here it is. First, those who traded funds illegally after 4PM should be face stiff punishment to discourage others. That said, everyone should be able to trade in exactly the same way whether a very small investor or the largest of the large. This brings me to market timing. If market timing is not illegal and I can do it just the same as them then what is the problem? I have read that the proposal is to make funds charge 2% if shares are redeemed within 5 days of purchase. My question is how do you know whose funds a broker is trading if they bundle trades from perhaps hundreds of investors? The big boys can still take advantage of the system but the small investors like myself would pay the price. I realize 401 Ks and mutual funds are thought of as long term investments but my experience tells me buy and hold is not a prudent way to invest money in today's market system. Why take a risk for years to make a decent profit then sit back in a bear market and watch it all go in weeks or days even? The market runs up and down daily on news and market sentiment. Its the big traders driving the market--not me. Fund managers are not really out there looking after my interests. If the fund falls they let you ride it right down. If there are adjustments being made in the funds portfolio the individual investor is blind to that for weeks if not months. At my company we wanted the right to make changes to our investment mix daily and were given just that. Once a month was not enough. If big news breaks we should be able to protect our investment that day not next month. And if we are astute enough to see reason to shift money to make a better profit then why not as long as everyone in the fund has the same opportunity. What I am trying to say is protect the small investor from unscrupulous traders but give the small investor the freedom to ( and the credit for being smart enough) handle his/her money as they see fit. The proposal to charge 2% for shares of funds redeemed within 5 days seems feasible if all parties can be made to adhere to the rules. Making a rule where an investor cannot get back into a fund for 3 to 5 days and/or is locked into a fund for 3 to 5 days with no fee would serve the same purpose. Make funds reveal more information to investors on a regular basis especially fees. Give small investors the ability to think and do for themselves if they choose If 2% is charged make sure it goes back to investors not the pockets of managers Seek full disclosure of any moneys charged to investors and to who it goes Above all make sure I am free use my own intelligence to protect my own money on an even playing field. It was already decided that you must have $25,000 to day trade. That is a slap in the face of small investors. Its says if you are well off and have money, then fine trade at will, but if you are not so well off then you cannot because ?? You are too dumb? Little people are not welcome? Its our toy you can't play? You must be protected from yourself? The entire exchange system has been geared towards wealthy traders for decades and now that technology has given everyone the ability to participate in the greatest system in the world then please let us!!!