SEC Eyes 'Hard Close' Options

WASHINGTON -- Securities and Exchange Commission Chairman William Donaldson said Thursday the SEC may adopt alternatives to a proposed rule that would bar mutual funds from accepting orders after the market close for trades at that day's price, Reuters reported.

The commission's so-called "hard 4 p.m. close" proposal is aimed at ending illegal late trading in fund shares, one of several improprieties behind scandals swirling around the $7.5-trillion U.S. mutual fund industry.

Opposition to the measure, proposed in December, has been voiced by funds, lawmakers and some investor activists who fear it could shorten the trading day for some investors by forcing funds to close their trading windows earlier.

"It may very well turn out that we adopt a combination of some of the alternatives that have been presented to us," Donaldson said in prepared remarks to the Senate Banking Committee at a hearing on mutual funds.

-- NYSCPA.org News Staff

Posted on 4/8/04