voted Tuesday to adopt new market timing disclosure rules for mutual funds and variable annuity products. Effective December 5, 2004, mutual funds and separate accounts offering variable annuities must disclose when they use fair value pricing and what their policies and procedures are regarding disclosure of portfolio holdings and market timing.
The Investment Company Institute
voiced strong support of the SEC decision. President Matthew Fink
said it "demonstrates [the SEC's] resolve to develop a necessary regulatory response to abusive trading practices involving mutual funds."
The new rule is intended to prevent fund firms from allowing large investors special, undisclosed trading privileges. Jeffrey Ptak
, a Morningstar
analyst, told the Wall Street Journal
, "Fund companies are increasingly getting the message that they cannot make exceptions for certain parties of investors - or if they do, it needs to be clearly set forth."
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