Hard Close' a Step Closer in New Year?
Traders Magazine, December 2004
The Securities and Exchange Commission may finally come up with a plan in 2005 to curb the kind of trading abuses blamed for the U.S. mutual fund scandals, which rocked the industry more than a year ago. But the agency is having a tough time pleasing everyone. Nevertheless, this year may see some proposals from the SEC for a "hard close" to clamp down on illegal after hours trading, and a mandatory two percent fee to discourage market timing. Progress has been slow because of a plethora of opposition and the practical implications of change. The original hard close proposal would put pressure on funds to complete a trade in the U.S. well in advance of the 4 p.m. close (Eastern Time) to obtain that day's price. Some critics were angry. For instance, there were fears that investors on the West Coast would have a nightmare trying to obtain the same-day closing price.
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