Regulators from the Department of Labor and the Securities and Exchange Commission are arming pension plan providers with tips for spotting illegal mutual fund trading activities within their plans, Defined Contribution News reports. The repeated messages from regulators are gradually becoming a subtle indication that trustees may facing increased liability for ignoring the warning signs of improper conduct such as irregular asset flows within funds offered through their retirement plans. Cynthia Fornelli, deputy director of the SEC's division of investment management, recently said that the Commission has demanded that mutual funds highlight market timing policies in their prospectuses and has asked retirement plan providers to become proactive in studying the information. Some retirement plan providers have complained about the added responsibility of monitoring mutual funds for improper conduct. The SEC has responded to these criticisms by advising the sponsors to consider purchasing fiduciary liability insurance.
Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.
Insight and analysis into the management, marketing, operations and technology of the asset management industry.
Have an account? Sign In