Florida State Board of Administration, Tallahassee, approved a series of stepped-up warnings and restrictions on trading for participants in its $4.6 billion 401(a) plan who engage in excessive trading and market timing.
Those who ignore warnings under the policy would be banned from online and telephone trading access to their 401(a) accounts and permitted to conduct trades only by paper instructions for at least 12 months.
Market timing is defined as a series of transactions that are round-trip trades, or purchases and sales within the same investment fund, and that are at least $75,000 in aggregate within a 30-day period. Excessive trading involves at least two or more occurrences of market-timing trades by a participant.
The board previously had no policy on excessive trading.
Dennis D. MacKee, FSBA communications director, characterized excessive trading among plan participants as “minimal” but said, “it's still an issue.” Statistics on excessive trading were not available.
