A bipartisan group in the U.S. House of Representatives voiced their opposition to a proposal by the Securities and Exchange Commission (SEC) that would impact mutual fund investors.
Currently, mutual fund investors who place orders by 4:00 p.m. ET will receive that day’s price of the mutual fund. However, this new SEC’s proposal would change by implementing a hard close on mutual funds orders. This would require retail investors to submit their orders well in advance, to receive that days’ price. Also, this puts those living in the Pacific Time zone at a significant disadvantage, as they may have to submit orders as early as 9:00 a.m. ET to receive that day’s price.
“I am pleased to have spoken personally about these concerns with SEC Chair Gensler on Tuesday,” U.S. Rep. Brad Sherman (D-CA), ranking member of the Subcommittee on Capital Markets, said. “I’m pleased that many of my colleagues joined me in this effort to urge the SEC to reevaluate this proposal and ensure that any new rules are made with the best interests of all investors in mind.”
Sherman, along with 36 colleagues, including U.S. Rep. Ann Wagner (R-MO), chair of the Subcommittee on Capital Markets, sent a letter to SEC Chair Gary Gensler, urging him to withdraw this proposal.
U.S. Sens. Ron Wyden (D-OR) and Mike Crapo (R-ID), the leaders of the Senate Finance Committee, have previously sent letters to the SEC expressing concerns with the proposal’s impact on retirement savers and retail investors.