[9711]
February 25, 1998
TO: SEC RULES COMMITTEE No. 16-98
RE: FORMATION OF EARLY MARKET CLOSING TASK FORCE
______________________________________________________________________________
As discussed at the recent meeting of the SEC Rules Committee, when market volatility in
October 1997 triggered the New York Stock Exchanges circuit breakers and the market closed early (at
approximately 3:30 pm), different fund groups followed different approaches to pricing orders that came
in between 3:30 and 4:00. (Some investors received that days price; others received the next days
price.) While the NYSE has proposed changes to the circuit breaker rules that, if adopted, would make it
less likely that the market would close early, an early market close still could occur.
The Institutes Board of Governors and Executive Committee have recommended that the
Institute work with its members to develop a uniform approach to pricing mutual fund purchase and
redemption orders received by funds after an early market close but before the normal market closing
time of 4:00 pm.
The Institute is forming a task force to address this matter. If you are interested in participating,
please fax your response to me at (202) 326-5827 or send an e-mail to frances@ici.org, by Wednesday,
March 4th. (A sign-up sheet was circulated at the February 18 Committee meeting, but it disappeared.
Therefore, even if you signed up at the meeting, please send your response.) We will schedule a meeting
or conference call of the task force in the near future.
Frances M. Stadler
Associate Counsel
____________________________________________________________________________________
I would like to participate on the Early Market Closing Task Force
Yes ____ No ____
Name (please print)_______________________________________
Firm ____________________________________________________
Telephone No. ____________________________________________