United States: Time to Get Cross!
By: Thoreau A. Bartmann and Lance C. Dial
It’s been a rocky road for cross trading fixed-income securities by mutual funds.
Before 2020, when the Securities and Exchange Commission (SEC) adopted the valuation rule, the primary challenge was that Rule 17a-7’s pricing requirements were difficult to implement. Then the valuation rule made such trading far more difficult, effectively carving most fixed-income securities out of Rule 17a-7 altogether. At that point, funds missed the days when it was merely difficult to cross trade fixed-income securities!
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