The US Securities and Exchange Commission has retreated from a plan that would have forced many mutual funds to overhaul their pricing models.
The original proposal would have imposed so-called swing pricing during periods of high redemptions, making it costlier for investors to cash out when markets are roiled. It drew strong opposition not only from the industry but also from Democratic lawmakers who warned the measure could impose heavy burdens on investors saving for their retirements. More than 60% of 401(k) plan assets are held in mutual funds.
The SEC’s meeting agenda for Wednesday makes no mention of a swing-pricing mandate for the $24 trillion asset class. The regulator will instead vote on more-frequent disclosures of mutual-fund performance that had accompanied the swing-pricing measure. It will also decide whether to address heavy redemptions by issuing new guidance on existing liquidity risk-management rules.
The SEC would require mutual funds to report portfolio holdings monthly rather than quarterly. The disclosures are “particularly important in enhancing the commission’s ability to respond during times of stress or fast-moving events,” SEC Chair Gary Gensler said in his remarks.
The pullback appears to be a win for the industry, including asset managers T. Rowe Price Group Inc. and BlackRock Inc., both of which opposed the November 2022 plan. One sign that it was coming was the SEC’s decision last year to back off a swing-pricing proposal for money-market funds.
However, it’s unclear whether a swing-pricing rule for mutual funds will resurface. The agency indicated in July that it was a possibility.
Swing pricing is essentially a cost imposed on investors redeeming shares. It adjusts — or swings — the share price above or below a fund’s net asset value per share, in the event that flows in or out of a fund are deemed to be too large.
At the time of the proposal, SEC Chair Gary Gensler described the swing-pricing mechanism as a way of staving off liquidity shortfalls in mutual funds during market tumult. The measure also would have required funds to maintain at least 10% of a fund’s assets in highly liquid investments to manage market stress.
Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.
The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.
The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.
Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.
"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
