Home Swing Pricing Resource Center
On October 13, 2016, the Securities and Exchange Commission (SEC) amended Rule 22c-1 of the Investment Company Act of 1940 to permit, but not require, mutual funds (except for money market funds) to use swing pricing. Swing pricing is viewed as a means of enabling funds to more equitably allocate portfolio transaction costs attributable to large shareholder purchase or redemption orders. Through adjustments to a fund’s daily per-share net asset value (NAV), swing pricing causes purchasing or redeeming shareholders, rather than the fund, to bear estimated portfolio transaction costs attributable to their activity. The SEC believes that swing pricing could be an effective tool in mitigating potential shareholder dilution, and may be an additional tool to manage a fund’s liquidity risk.
Implementing swing pricing will require a fund to address and overcome significant operational hurdles, and doing so is likely to be complex and multifaceted. This resource center is designed to help ICI members understand these new requirements, implement their swing pricing programs, and administer them going forward. Contact Joanne Kane (joanne.kane@ici.org or 202-326-5850) for more information or if you need further assistance.
Related Regulatory and ICI Initiatives
The SEC’s adoption of the swing pricing rule coincided with its adoption of new enhanced fund reporting requirements for registered funds and rules for liquidity risk management programs. Visit our Investment Company Reporting Modernization Resource Center and Liquidity Risk Management Program Rule Resource Center for more information on these topics.
Financial Stability Resources
Visit our Financial Stability Resource Center for more information around the topic of financial stability, which ICI has addressed extensively in response to inquiries and papers from other regulatory bodies.
