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April 30, 2004

SEC Goes Soft On Hard Close'

By Gregory Bresiger

Faced by widespread opposition from politicians and hundreds of investors, the Securities and Exchange Commission is taking a closer look at watering down a controversial proposal designed to prevent after-hours stock-trading abuses.

The so-called hard close' plan could see the light with approaches that are softer than the original proposal. That proposal would require mutual funds and other big investors - instead of third parties - to receive trades by 4 p.m. in order to get that day's price. The new approaches include an electronic time stamp to verify the price and time of trades.

"It may very well turn out that we adopt a combination of some of the alternatives that have been presented to us," according to SEC Chairman, William Donaldson. But he noted that a time stamp was not a perfect solution.