MessageFrom: pampanther [pampanther@cox.net] Sent: Tuesday, May 11, 2004 5:31 AM To: rule-comments@sec.gov Subject: File No. S7-11-04 May 9, 2004 Jonathan G. Katz Secretary Securities and Exchange Commission 450 Fifth Street, NW, Washington, DC 20549-0609. Dear Mr. Katz: Proposed 2% redemption fees: Because of a few highly publicized indiscretions, the suggested 2% redemption fees are targeting ALL fund investors. It attempts to address an immediate need without considering long-range consequences. These proposed rules would place additional hardship on small investors. They appear to be designed to further benefit the mutual fund companies by giving them even more fees. The overwhelming majority of citizens find mutual funds their only reasonable investment choice. The hedge funds and large professional institutions will always be able to implement their strategies in other market vehicles and across time zones. If the recent SEC proposals are enacted, these entities will continue to have a significant advantage over small investors who will be hindered by mandatory holding periods and needless redemption penalties. Some alternative proposals for your consideration are: 1. Recommend that fund families create different classes of securities for investors who are long term and those who may wish to make adjustments to their mutual fund holdings. The new classes could have higher costs and maintain higher cash levels. 2. Allow each fund company to create their own rules for redemption fees and exchange frequency. This would give shareholders more options to consider before they invest. It would allow free market forces to weed out the fund families that take advantage of their investors. 3. Require clear and unambiguous language regarding rules and policies in the fund prospectuses that an unsophisticated investor would be able to comprehend. I trust my concerns will be fairly considered as your agency review policies to reform the investment company industry. Yours truly, Pamela K. Panther Las Vegas, NV