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Money Management Executive

SEC May Impose Anti-Timing, Late Trading Rules

Published October 01, 2003, 1:00 a.m. EDT
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Updated October 01, 2003, 1:00 a.m. EDT
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Securities and Exchange Commission Chairman William Donaldson testified before the Senate Banking Commitee Tuesday that the commission is studying possible rules to thwart market timing and late trading, the issues at the epicenter of the New York State Attorney General’s investigation, Reuters reports.

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"Our staff is studying whether we need measures to prevent the circumvention of forward pricing requirements for fund shares and market-timing restrictions," Donaldson said. This includes a vigorous "action plan" that involves working closely with the New York Attorney General and other state prosecutors.

"We are using our examination authority to obtain information from mutual funds and broker/dealers regarding their pricing of mutual fund orders and adherence to their stated policies regarding market timing," Donaldson added

In response, the Investment Company Institute issued a statement from its chairman and president praising Donaldson’s plan to protect the nation’s 95 million shareholders. "Mutual fund companies welcome this initiative and will offer any assistance that the commission deems helpful," said ICI President Matthew Fink.


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