Swing Pricing, Hard Close, and Liquidity Risk Management
Protect your investments from political games by telling the SEC that their swing pricing, hard close, and liquidity risk management proposal is unworkable and harms investors!
The SEC’s current swing pricing, hard close, and liquidity risk management proposal could seriously harm investors.
Mutual funds are the backbone of retirement investing for millions of Americans. The SEC’s proposal to implement mandatory swing pricing, hard close, and liquidity risk management for mutual funds will drastically change the investor experience and reduce investor choice.
The SEC has proposed to mandate ‘swing pricing’ for mutual funds. This would fundamentally change how mutual funds are managed, operated, and priced—as well as how investors purchase and sell their shares.
The agency has also proposed to cut off funds from taking trade orders from intermediaries–like your broker–as the clock strikes 4 p.m. in New York. That’s just 1 p.m. on the West Coast. This means that if you choose to sell a portion of your shares, you might not even know the final price until the following day.
The new liquidity risk management framework would dramatically alter the way funds assess and classify the ease with which investments can be traded, potentially making many popular funds unviable in their current form.
The SEC claims that these rules will better prepare open-end funds for market stress and mitigate dilution of shareholders' interests. However, these justifications fail to stand up under scrutiny.
