Barrington Partners to Release Best Practices Review of Market Timing in Late July.

Barrington Partners Best Practices Review: Market Timing

BARRINGTON PARTNERS RESEARCH
Scheduled for release in late June, the 'Best Practices Review' consists of a detailed assessment and examination of the issues of market timing and fair value. The Best Practices Review will feature:
- A discussion of the issues facing the fund accounting and transfer agency functions of the mutual fund business.
- Potential Solutions: Interviews with fund company executives addressing their policy and procedures for addressing fair value pricing and market timing are included.
- Evolving Market Practices
- Additionally, information from interviews with the following groups are also included:
* NSCC
* Pricing vendors
* Third party service providers

RESEARCH CONTENTS
The Market Timing Best Practices Review is comprised of the following sections:
Overview of the Issues:
· Brief history of market timing, fair value pricing and stale prices
* Definition and background of market timing, fair value pricing and stale prices
* Discussion as to why these issues need to be addressed
· Legal perspective
* Summarized overview of the current SEC legislation
* Identification and summary of the proposed legislation by the SEC
* The ICI position and opinion
* Legal interpretations
Fund Accounting Solutions:
· Pricing vendors
* Summary of the pricing models being offered by a number of firms
· In-house methods
* Identification of the companies that have developed internal solutions
Transfer Agent Solutions
· Monitoring shareholder trades and identifying market timers
* Overview of the what the fund companies are mandating
* Identification of how are they are monitoring these mandates
· Obligation to prevent market timing
* Current guidelines published by the SEC and NASD
* Methods to prevent market timing
* Identification of the methods
* Discussion regarding fees and/or restrictions on market timers
· Obligation regarding “look-through” omnibus accounts
* Identification of obligations of Plan Sponsors and participant recordkeepers under ERISA
* Identification of NASD taskforce recommendations
* Issues surrounding broker/dealer accounts
* Review of Fund Supermarkets and NSCC issues
Best Practices
· Fund Companies – Fund Accounting
* Identification of criteria for implementing fair value pricing
* Definition of a significant event
* Identification of stale prices
* Listing of which fund companies have implemented fair value pricing
* Identification of other methods being implemented to limit market timing
· Fund Companies – Transfer Agent
* Identification of what transfer agents are currently doing to prevent market timing
* Summary of how the cost of market timers are being quantified
* Short-term trading fees – do they work?
* Redemption fees – do they work?
* Restrictions on number of trades – does this work?
· Interviews
* Opinions on the current issues from the fund companies, NSCC, attorneys, 3rd party service providers and pricing vendors
Summary
· Summary of the issues, opinions and best practices

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