Compliance June 30, 2006

SPARK Issues 'Best Practices' for Trade Monitoring by RK

June 30, 2006 (PLANSPONSOR.com) - The SPARK Institute announced it has developed 'best practices' for frequent trading monitoring by retirement plan recordkeepers.
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Robert Wuelfing, SPARK Institute president, said in the announcement the guidelines  will reduce the number of alternatives required for compliance with Securities and Exchange Commission (SEC) rule 22c-2 which  reduce s  administrative complexity and confusion among service providers, plan sponsors and participants,  and offers  a cost-effective approach for the retirement plan and mutual fund industries.

Larry Goldbrum, general counsel of The SPARK Institute, said   the ‘best practices,’ developed by the Society for Professional Actuaries and Recordkeepers (SPARK), is based on a review of current industry practices and responses to a SPARK Institute member survey.

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The ‘best practices’ a ddress the following aspects of frequent trading monitoring:

  • Transactions Subject to Monitoring
  • Round Trip Identification Period
  • Monitoring Period 
  • Participant Warning Notices
  • Purchase Restriction Period
  • Restoration of Trading Privileges 
  • Reporting to Funds
  • Trading Restrictions
  • Plan Sponsor and Participant Communications

Copies of The SPARK Institute’s best practices for frequent trading monitoring and its sample contract language are available by contacting the Institute at 860-658-5058

Investing June 29, 2006

FOMC Approves 17th Consecutive Rate Increase

June 29, 2006 (PLANSPONSOR.com) - The Federal Open Market Committee (FOMC) raised the federal funds interest rate a quarter percentage to 5.25 percent.
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In its  press release , the FOMC said it raised its target for the federal funds rate in response to a moderation in economic growth. According to the release, the economic growth moderation stems partly from a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

The raised target should offset core inflation, which has been elevated in recent months, the committee noted in the release, but there is still a risk of inflation.

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The increase is the 17th consecutive increase approved by the FOMC.

The rate is of concern for plan sponsors since most retirement plan loans use an interest rate based on the prime rate.

The Board of Governors also unanimously approved a 25-basis-point increase in the discount rate to 6.25 percent.

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