2 Congressmen Ask SEC to Reconsider Late-Trading Rule

WASHINGTON -- Two top House Financial Services Committee members urged the Securities and Exchange Commission to reconsider a proposed rule that would bar mutual fund trades after 4 p.m. ET, Dow Jones reported.

As part of its efforts to clean up trading abuses in the mutual fund industry, the SEC proposed a regulation in mid-December to eliminate after-hours trading by requiring a 4 p.m. "hard close." But Reps. Michael Oxley, R-Ohio, and Richard Baker, R-La., said in a letter sent to SEC Chairman William Donaldson Wednesday that the rule "will actually confer additional harm upon innocent mutual fund investors."

Oxley, chairman of the House Financial Services Committee, and Baker, chairman of the subcommittee on capital markets, said the proposal would shorten the trading period for some investors, with cut-off times as early as noon ET.

"By confining their trading period, this proposal would effectively relegate these investors to a second-class status," the letter said.

-- NYSCPA.org News Staff

Posted on 4/1/04