Role of Auditors | Bankruptcy | Soft Dollars | Mutual Funds
MUTUAL FUND LATE TRADING
Overview
Proposals to correct abuses in mutual fund late trading practices.
Postion
SIA supports a hard close at the broker-dealer or other intermediary level, provided they have systems and procedures in place (e.g., electronic computerized time stamping) designed to prevent acceptance of trades by such intermediaries after the time the net asset value has been determined. A hard close at the broker-dealer or other intermediary is critical for most retail investors and retirement plan participants. A hard close at the fund has significant drawbacks for investors, and may pose major operational difficulties. Such a proposal would be acceptable only as long as it were subject to the same systems and procedures requirements to assure timely receipt.
Status
Language to address late trading is included in all current mutual fund legislation except S. 1822 (Akaka bill). H.R. 2420 (Baker bill) specifically directs the SEC to write rules to prevent late trading but permit execution of those trades collected at an intermediary as long as procedures are in place to prevent abuse. H.R. 2420 passed the House floor on the suspension calendar by a vote of 4182 November 19, 2003.
