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 Coalition of Mutual Fund Investors , a Washington-based consumer advocacy group, redemption fees, which are imposed by the most of country’s 50 largest mutual fund providers, are ineffective at blocking market timing. The majority of these firms routinely waive these sanctions because their enforcement offices lack access to pertinent information about their shareholders.

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 survey’s 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.

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