SPARK Institute: SEC’s Swing Pricing & Hard Close Proposal Disadvantages America’s Retirement Investors

Today the SPARK Institute submitted a letter to the Securities Exchange Commission (SEC) highlighting retirement industry members’ concerns with its proposal for Swing Pricing and Hard Close. A similar proposal on Swing Pricing was made 20 years ago, and subsequently dropped. The concerns the retirement industry raised then are the same as those voiced today.

SPARK views this proposal as doing harm to millions of American workers actively saving for their retirement as well as those who are now living on their retirement savings. SPARK cites four negative outcomes if this change is implemented:

  1. It will turn 130 million American savers into second class investors and favors institutional Wall Street investors over Main Street investors.
  2. It will make everyday retirement plan transactions – such as purchases, loans, and required minimum distributions – extremely difficult if not impossible to execute.
  3. It will undermine the open investment architecture system developed over the last 30 years, potentially leaving retirement investors with fewer choices.
  4. It will erode retirement savers’ confidence in the system, since transparent, timely pricing will not be as widely available.

“While we share the SEC’s goal of maintaining orderly markets, we believe that this proposal is not the best way to accomplish their goal,” said Michael Hadley, a partner with the law firm of Davis & Harman LLP. “Whatever the proposal’s potential benefits, they are far outweighed by the damage it will do to our retirement system.”

When asked to highlight some of the harms this proposal will have for participants in retirement plans, Tim Rouse, the Executive Director of SPARK, noted: “This proposal establishes an order for processing trades, with large institutional investors going first and everyone else going second. This would mean retirement savers will have much earlier trade processing cut-offs. And it’s likely that their trades will end up getting delayed by a full day. This will disadvantage – and confuse – many retirement investors who rely on prompt and transparent account transactions.”

For more information, please contact Tim Rouse at

About SPARK Institute
The SPARK Institute represents the interests of a broad-based cross section of retirement plan service providers and investment managers, including members that are banks, mutual fund companies, insurance companies, third-party administrators, trade clearing firms, and benefits consultants. Through the combined expertise of its member companies, the Institute provides research, education, testimony, and comments on pending legislative and regulatory issues to members of Congress and relevant Government agency officials. Collectively, its members serve approximately 100 million participants in 401(k) and other defined contribution plans.

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