The following comment on Letter Type I,
or variations thereof, was submitted by
2 individuals or entities on S7-27-03.
Letter Type I:
Senator Gordon Smith
121 SW Salmon Street, # 1250
Portland, OR 97204
Dear Senator Smith:
I'm writing to protect mutual fund shareholders in the state of Oregon.
The Securities and Exchange Commission ("SEC") has proposed a regulation that would prohibit a mutual fund from processing any transaction that it does not receive by 4:00 P.M. EST; commonly referred to as a "hard 4:00 P.M close." The stated purpose of this legislation is to prevent late trading, i.e., accepting trades after the close of a market. However, if imposed, this requirement will:
- disadvantage shareholders in time zones other than Eastern even more than they are today. Shareholders in the Pacific, Mountain and Central are already disadvantaged by the 4:00 P.M. ET market close due to time zone differences. The hard close will magnify the disadvantage by hours.
- disadvantage most, if not all shareholders who invest through intermediary, such as a 401k plan or broker/dealer, compared to shareholders who purchase shares directly from a mutual fund. Intermediaries typically need several hours to aggregate orders to forward to mutual funds.
- create a multitude of deadlines for investors.
- be very expensive to change for the industry.
- ignore easier, more practical and less expensive solutions such as mandatory certifications by financial intermediaries that they comply with the law.
As a financial advisor in Oregon, I Request that you help encourage the SEC to adopt a more practical solution by opposing the "hard 4:00 P.M.close."