Jan. 25, 2023
Dear Chairman Gensler, Between me and my family we hold multiple investments in mutual funds. As one of the more than 100 million Americans who invest in these products, I am writing in opposition to File Number S7-26-22, the SEC’s proposed rule on open-end fund liquidity and swing pricing. My mutual funds are both personal investments and a key part of my retirement planning. More than half of 401(k) assets in America are held in mutual funds, and the SEC’s proposed rule to mandate swing pricing will seriously harm long-term savers, like me and my family. Specifically implementing the ‘hard close’ will likely make it impossible me, or my agents, to place timely trade orders on my behalf reducing or eliminating my opportunity to participate in the markets like other - perhaps larger and more sophisticated - investors. While the SEC’s proposal positions itself to be about liquidity, it fails to note that mutual funds are highly liquid products - thus on its face the proposal makes little sense to me. Instead of solving a real-world problem it either creates or imposes restrictions on me, and other similar investors seeking broad market exposure through mutual funds that are appear unnecessary. Additionally, the proposed rule appears to go against a core underlying purpose of mutual funds, identifying specific conditions where investors will be treated differently than they would be in other circumstances. Finally, it has clear implications of impacting bystander investors that simply transact (or even just reinvest a fund distribution) on a day where a "swing price" is imposed on a fund. The SEC needs to pay attention to the data that the Investment Company Institute has provided before recommending such drastic changes that have no obvious benefit to shareholders. The SEC’s proposal would fundamentally disrupt funds’ current practices, upend long-standing approaches to calculating share prices, and ultimately make investing more confusing for everyday Americans trying to retire or save for their long-term goals. The bottom line: the SEC needs to go back to the drawing board, drop this reckless proposal, and let mutual funds continue to serve American shareholders. Best, Geoffrey Black