The mutual fund industry may have overstated its ability to deter market timers because compliance officers and securities regulators lack the ability to control individual investors personal brokerage accounts, Reuters reports.
According to a new study produced by
The very infrastructure for selling mutual funds which includes third-party intermediaries, like brokerage firms and online trading platforms thwarts efforts to arrest market timing by shielding investors identities in omnibus accounts, the surveys authors said.
The survey also notes that mutual fund prospectuses printed after the initial wave of market timing scandals often include warnings saying that market timing is difficult to thwart.
