The SEC may require swing pricing for the majority of funds.
In November, the Securities and Exchange Commission proposed to mandate swing pricing procedures for most open-end investment companies whenever their net asset value (NAV) per share encounters net purchases or redemptions. In light of recent market turmoil, shareholder dilution risk is a significant worry that this plan seeks to address. Swing pricing, however, is not a panacea for mutual funds. It is a challenging, expensive, and complicated process that requires numerous basic adjustments to current working procedures.