WASHINGTON - Today, Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Senate Health, Education, Labor, and Pensions Committee Ranking Member Bill Cassidy, M.D. (R-LA) rebuked the Biden administration’s “hard close" proposed rule that limits Americans’ ability to trade in mutual funds, threatening millions of retirement plans.
In 2022, the Securities and Exchange Commission (SEC) published a proposed rule that would deny same-day pricing for mutual fund trade orders that are not received by the mutual fund, its transfer agent, or a registered clearing agency by an established cut-off time, typically 4:00 PM ET. The proposal would particularly burden American retirement plan investors with investments in mutual funds by forcing a lag of up to a day on retirement plan investor mutual fund purchases and sales. It would also give investors who trade directly with a fund’s transfer agent a significant advantage over retirement plan participants by allowing same day pricing to all but retirement plan participants.
In the letter, Foxx and Cassidy write: “We write to express our strong opposition to the Securities and Exchange Commission’s (SEC) proposed rule... which could have devastating consequences for millions of America’s retirement savers. The [proposed rule] is intended to provide additional safeguards to prepare for stressed market conditions...However, we are concerned that the harm the [proposed rule] would cause to the retirement savings of American workers far outweighs any benefits."
Foxx and Cassidy continue: “With fewer Americans prepared for retirement, the last thing the federal government should be doing is taking steps to hinder savers’ access to a secure retirement. We encourage the SEC to reverse course and eliminate a hard close from any future rulemakings."
Read the full letter here.