The following comment on Letter Type B,
Letter Type B:
Mr. William H. Donaldson, Chairman
Dear Chairman Donaldson:
As trustee for the _____________________________ (the District) benefit plans, I am opposed to imposition of a "hard close" for settlement of mutual fund orders for participants in any employee benefit plans. This proposed change will virtually eliminate same day settlement of enforced the 4:OO p.m. Eastern Time close for same-day market orders, and settles these trades in the hours following the market close. I believe it is unfair to penalize the participants in our benefit plans for the abuses committed by others. The imposition of a "hard close" rule will force most participants to have a lag of a day or more to settle fund trades which are now handled overnight.
I also encourage the SEC to uniformly define "market timing". Our plans currently utilize investment options from a number of different mutual fund companies. Without a common definition of "market timing", participants will be confused about the different rules applicable to different funds. In addition, our participants may face increased administrative fees or restrictions if our recordkeepers have to enforce multiple definitions of "market timing" among different funds.
The District's pension and deferred compensation plans are popular with our employees who use these plans as their primary supplemental retirement savings vehicle. Technological advances have enabled us to offer our employees many of the same opportunities available to larger investors, and at a reasonable cost. The imposition of a "hard close" on defined contribution pension plans will harm millions of small investors who enjoy the convenience of current trading practices.