Before the year is out, the Securities and Exchange Commission hopes to have the problems of late trading and market timing rectified, Dow Jones Newswires reports.
Two proposals, the 4 p.m. "hard close" for trades and the 2% redemption fees for quick withdrawal of money after purchases, would help curb the two most popular types of trading abuses prevalent in the ongoing mutual fund scandal.
"The staff has set a goal of the end of the year for making a recommendation on these," SEC investment management division senior advisor Jennifer B. McHugh told Dow Jones.
Possible alternatives to the 4 p.m. close suggestion, which would help curb illegal late trades, are being analyzed by the SEC. The Commission has received more than 1,000 letters about the hard close, with many of those letters criticizing it. Pension funds, among others, think that the hard close would hurt the way they process transactions. One alternative would be a third-party auditing system.
While the 2% redemption fee proposal is a little less controversial, the SEC is still looking at whether to allow individual fund boards the power to accept or reject the idea of imposing such a fee.