From: barbara smith [bcudzy@yahoo.com]
Sent: Saturday, December 20, 2003 7:58 AM
To: rule-comments@sec.gov
Subject: File No. S7-27-03

The Honorable Members of Congress and the Securities
and Exchange Commission,

I am writing to comment on the proposed rules and to
voice my concern regarding your proposal for
correcting "late day trading".

As an investor in my Company's 401(k) plan I share
your concern regarding late day trading of mutual
funds which allowed certain people to make trades
after the close of the markets thus knowing in advance
the closing price of a mutual fund.  Clearly, this is
a serious issue as it disadvantages typical investor
such as myself who do not make such trades.


However, it is my belief that you are attempting to
correct this problem in a way that will seriously
disadvantage participants in 401(k) plans.  Simply
put, rather than allowing thrift and savings 401(k)
plans to accept transfers among funds up until 4:00 PM
each day, such transfers would have to be stopped well
in advance of the close of the markets so that all
processing can be done and the actual orders for
trades can be placed in the hands of the mutual funds
by 4:00 PM. 


This means for example, that my plan could not accept
transfers later than 10:00 AM or 11:00 AM each day. 
This is because all accounts have to be balanced,
loans processed, directions sent to the Trustee, etc. 
In effect I will be blocked out from trading for
several hours each day. 


These rules will place all 401(k) plan participants at
a disadvantage to other investors who will still be
able to trade up to the market closing time. 


There are ways to prevent the problem of late trading
in 401(k) plans (no evidence has shown that this was
actually a problem in such plans), such as
electronically stamping the time of transfers, audits
and stiff penalties for violating the rules, all of
which are acceptable ideas, but it seems unfair that
401(k) plan participants will be prevented from
trading mutual funds hours in advance of everyone else
simply by the nature of the record keeping process in
such plans.

I sincerely hope that you will consider my proposals
favorably and maintain an even playing field for all
investors including those in 401(k) plans.

Respectfully,

Barbara Cudzynowski


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