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March 1, 2004

Thinking Twice About Late Trading Proposal

By Gregory Bresiger

Five securities industry trade groups, affirming that they want late trading stopped, nevertheless cautioned in a letter to regulators that the SEC's reform proposal may "disadvantage millions of mutual fund shareholders." The group includes the Securities Industry Association, the American Bankers Association and the Financial Services Roundtable. The SEC late trading plan calls for a mutual fund order to receive the current day's price only if received before the daily deadline - usually 4 p.m. Eastern Time. Many fund administrators, the group points out in its letter, would be forced to establish earlier cut-off times. "It would require significant changes to investors' current practices and create confusion among investors," wrote Marc Lackritz, president of the SIA.