From: Mike Blake [blakem@businesslogic.com]
Sent: Thursday, January 08, 2004 10:23 AM
To: 'rule-comments@sec.gov'
Cc: 'dick@durbin.senate.gov'; 'president@whitehouse.gov'
Subject: S7-27-03:

Dear SEC:
 
I feel that a 4PM hard stop on mutual fund trading across the board would have 
the unintended consequence of limiting fair access to the markets by 401K paln 
participants whose plans are recordkept by non-mutual fund plan providers.   
I suggest that an exception to this rule be put in place for certain financial 
entities, like 401k plan providers, whose systems can and do prevent orders not 
originated by 4 PM from reaching fund companies after the 4PM deadline.

The consequences of an across the board hard stop would be to 1) put many 401k 
plan participants at a 1 day disadvantage since many orders would not be processed 
until the following day, 2) diminish competition in the 401k industry by giving 
an unfair advantage to plan provider who provide mutual funds as well and therefore 
can meet the 4PM hard stop, which would in effect 3) give these providers greater 
pricing power and will drive up fees that ultimately are passed along to the 
participants.   Lastly, by implementing a 4PM hard stop across the board new 
abuses will come up.  For example, all the orders not received by 4PM will collected 
at the end of the day and provide an indication of the following day's market movement.  
This information will not be available to all but will provide a few an unfair 
advantage....the next form of market timing.

While reform in the mutual fund industry is certainly needed, I encourage you to 
consider the impact of rule such as the 4PM hard stop and permit modification where 
controls exist to prevent abuse and benefit the investing public.

Thank you for your consideration.

Michael Blake
 
 
 
Michael Blake - Director, Financial Markets
O (312)264-7515 | M (312)735-5938 | F (312) 264-6702

 
 
 
 
 
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