Do other plans and mutual funds place trading restrictions on their participants?
The financial industry has responded in a variety of ways to the challenge of frequent trading in its mutual funds. Consequently, most large mutual fund families have adopted some type of trading restrictions or they have implemented a fee structure. The TSP reviewed the restrictions in place for many of these mutual funds and determined that allowing participants two interfund transfers per month, with subsequent interfund transfers only to the G Fund was both reasonable and prudent. (The TSP restrictions are not as onerous as those of some institutions. For example, one institution restricts trades to once every 60 days; another provides for one round trip — an investment into and out of a fund — per year.) Although the Securities and Exchange Commission (SEC) does not have direct oversight authority with respect to the TSP, its views on frequent trading and its directive to mutual fund boards of directors is instructive. The SEC provides that, under rule 22c-2(a)(1), “the board of
The financial industry has responded in a variety of ways to the challenge of frequent trading in its mutual funds. Consequently, most large mutual fund families have adopted some type of trading restrictions or they have implemented a fee structure. The TSP reviewed the restrictions in place for many of these mutual funds and determined that allowing participants two interfund transfers per month, with subsequent interfund transfers only to the G Fund was both reasonable and prudent. (The TSP limits are not as onerous as the restrictions of other institutions. For example, one institution restricts transfers to once every 60 days; another provides for one round trip an investment into and out of a fund per year.) Although the Securities and Exchange Commission (SEC) does not have direct oversight authority with respect to the TSP, its views on frequent trading and its directive to mutual fund boards of directors is instructive. The SEC provides that, under rule 22c-2(a)(1), the board
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- Do other plans and mutual funds place trading restrictions on their participants?
