[16501]
September 5, 2003
TO: BOARD OF GOVERNORS No. 44-03
PRIMARY CONTACTS - MEMBER COMPLEX No. 73-03
COMPLIANCE ADVISORY COMMITTEE No. 70-03
SEC RULES MEMBERS No. 118-03
SMALL FUNDS MEMBERS No. 48-03
ACCOUNTING/TREASURERS MEMBERS No. 40-03
RE: MEMBER REVIEW OF HANDLING OF MUTUAL FUND ORDERS AND MARKET
TIMING POLICIES
In view of the New York Attorney General’s recent action involving a hedge fund and
its managers for late trading and market timing with respect to a number of mutual funds, SEC
Chairman Donaldson sent a letter (attached) requesting that the Institute promptly urge its
members to take certain steps to assure compliance with applicable regulatory requirements.
Accordingly, I urge all Institute members to immediately:
• seek assurances from your selling broker-dealers and other intermediaries that
they are following all relevant rules and regulations, as well as internal policies
and procedures, regarding the handling of mutual fund orders on a timely basis;
and
• review your market timing policies and procedures, as well as fair valuation
procedures, for sufficiency in addressing concerns in this area.
I am sure that you appreciate the vital importance of these issues in maintaining the
confidence of mutual fund investors. Please contact the Institute’s staff if you have any
questions.
Matthew P. Fink
President
Attachment (in .pdf format)