Are you concerned about 401(k) plan participants engaging in market timing and excessive trading?

Asked by kevbo (25672

) April 13th, 2009 from iPhone

I’m foolishly reading my statement, which includes the following:

Pursuant to new SEC rules, fund companies are required to enter into agreements with intermediaries to provide fund companies with the ability to identify and enforce restrictions on Participants engaged in market timing or excessive trading (prohibited trading), as defined by fund companies.

[Participants may be warned or restricted immediately.]

Thank you, SEC, for protecting me from the middle class.

Observing members: 0

Composing members: 0

1 Answer

Our 401k provider restricts movement in and out of a given fund to a relatively small (I think it is 3) in a single month. The other thing they do is they execute transfers only at the end of the following day after submission on the website. They also restrict transfers out of international funds, all requests must be in writing and mailed to Boca Raton FL.

A piece of this is to enable the fund managers to maintain stability in the fund value and their cash position.

If you want the rationale I could call our local office to see why they do this.

SRM

srmorgan (6773

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