As recent events make clear, market timing continues to be a significant concern for the mutual fund industry. The launch of federal and state investigations into an array of mutual fund houses has created a wave of public pressure to ensure that small, individual investors are protected. It is inevitable that the fund industry will need to implement more effective solutions to eliminate market timing opportunities.

Arbitrage opportunities arise when funds with international holdings compute their net asset values using prices from the close of foreign exchanges that can be stale by as many as 15 hours. Because local closing prices do not reflect after-hours events, time zone arbitrageurs effectively have the opportunity to buy today at yesterday's prices.

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