Mutual fund companies' new anti-timing rules are creating quite a bit of confusion among investors, Dow Jones reports.

Although many funds are now spelling out how many trades they permit in a fund in their prospectuses, in many cases they include an open clause that gives them the right to kick an investor out at their discretion - and that is causing a good deal of confusion. For example, prospectuses for Janus funds now tell investors that then "can make up to four round trips in a fund in a 12-month period, although the fund at all times reserves the right to reject any exchange purchase for any reason without prior notice."

can't do. Market-timing has become risky business, one that can grant you a kick out of a fun.

Morgan Lewis, a former SEC associate director, said that "a lot of people are looking at their market-timing policies now partly because of this omnibus account issue as opposed to egregious behavior by a hedge fund. They are going back and tweaking their prospectuses."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.