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FEFSI sees no evidence of market timing in Europe

EUROPE – The European investment fund industry trade body FEFSI says there is no evidence of US-style market timing problems in the European market.

“To date, there is no evidence that systematic market timing or late trading activities have occurred in the European investment fund industry,” Fédération Européenne des Fonds et Sociétés d’Investissement said in a statement

“Obviously, the European investment fund industry is well aware of the problem of market timing and late trading,” it added. The so-called market timing probe initiated by US regulators has already resulted in some high profile fund industry executives in the US losing their jobs.

But FEFSI says Europe’s different regulatory traditions and practices make it difficult to identify a single solution to the issue.

It said that the widely accepted practice of forward pricing in Europe ensures that acquisition and redemption orders are not accepted after the time at which fund units/shares are priced.

And it said that fund managers take measures to ensure that fund share prices are based on fair valuations. FEFSI has been trying to set principles of integrity for the fund industry.

The US moves prompted FEFSI to start “an exchange of information” among its member associations to ascertain what rules and practices existed in the various European countries regarding market timing.

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