Prepare for a 4:00 PM hard close

[Demosthenes]

It seems inevitable that a 4:00 PM hard close (i.e. only trades received by 4:00PM will get that days mutual fund price) will become the law of the land.

IMO, the SEC will not go so far as to require that the trades actually be at the transfer agent by 4:00 PM but will require some insurance that late trading is not taking place at an intermediaries operation. Requiring receipt of the trades by close would have serious effects on TPA's or for that matter on anyone with a multi-fund family product.

The form of that "insurance" could be onerous depending on how far the SEC is prepared to take the issue. While it may be premature, I'd like to generate some discussion on the possible effects of new regs related to a 4:00 PM hard close.

What steps are people taking to insure that trade sweeps take place promptly at 4:00 PM?

How prompt is prompt when it comes to the actual transmission of trades to the transfer agent?

I expect that the hard close will become an important SAS 70 audit and RFP question in the near future. Is everyone ready to objectively demonstrate that their operation has systems, policies, practices and procedures in place to insure a 4:00PM hard close?