Fidelity Investments and the National Securities Clearing Corp. have partnered in a yearlong project to develop the technology to time-stamp mutual fund trades, The New York Times reports. The two giants are hoping that by time-stamping trade orders that come via outside intermediaries, only those orders made by the so-called hard 4 p.m. close will be allowed to get through thus eradicating illegal late trading once and for all. The Times characterizes this as a "time-stamped lockbox."
Also, a secondary goal of the nations No. 1 fund company and the trade-processing leader in the nation, is to keep the 4 p.m. deadline for a days orders, so as not to penalize the nations 95 million mutual fund shareholders. One of the solutions that has been presented in this mutual fund mess, and one that the Investment Company Institute has supported, has been moving the deadline for trade orders back 1-1/2 hours to 2:30 p.m.