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NASD Fines Five Brokers $625,000 in Late Trading


The NASD has fined five brokerage firms $625,000 for failure to have the supervisory systems in place to detect and prevent late trading. The five are D.A. Davidson & Co., T.D. Waterhouse Investor Services, Stifel Nicolaus & Co., National Planning Corp. and SII Investments, Inc. Each of these firms processed trades after the 4 p.m. close of the market, the NASD said.

"To help ensure that illegal late trading does not occur, firms must implement systems to guarantee that all mutual fund orders processed after the close of the market were received during normal trading hours," said NASD Vice Chairman Mary Schapiro. "NASD will be vigilant about sanctioning firms for failing to have adequate supervisory systems in place designed to prevent manipulative late trading, regardless of whether such trading, in fact, occurs."

In settling with the NASD, the firms neither admitted nor denied the charges.

Mutual Funds Own 22% Of All Retirement Accounts

Retirement assets invested in mutual funds continued their ascent last year, as a strong rally in stocks and heavy net cash flow fueled a 28% pop in 2003, according to research released by the Investment Company Institute.

The recent surge brings total mutual fund retirement assets to a record $2.7 trillion, which represents a market share of 22% of the nation's retirement assets. The fund industry hasn't seen its market share that high since the height of the technology bubble back in 1999.

"Investors have shown, once again, their long-term commitment to mutual funds as a great way to save for retirement," said ICI President Paul Schott Stevens, in a prepared statement

U.S. retirement assets, which include annuities, IRAs and employee-sponsored pension plans, totaled $12.1 trillion at the end of 2003, up from $10.2 trillion the previous year. The net inflow to retirement accounts held in long-term funds rose to $110 billion from $80 billion, with a bulk of the flow going toward equity funds.

The results of the study are based on an annual ICI survey, with 14,059 mutual fund share classes responding, representing 83% of mutual fund assets.

Low-Cost Vanguard Funds Appeal to Investors in Asia

Vanguard Group's flagship low-cost index mutual funds are quickly soaking up assets from institutional investors through a newly opened distribution arm in Singapore.

Asian investors are warming up to Vanguard's style of diversifying assets while keeping costs to a minimum. Within the last nine months, they have ploughed $350 million into U.S. equity index investments, according to Jon Robinson, managing director of Vanguard's Singapore arm.

The influx of assets into index investments from markets like Korea and Taiwan affirms that Vanguard's legacy as a cost-conscious asset manager still appeals to institutional investors. In recent years, Vanguard has diversified into pricier types of actively managed mutual funds.

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