However, we believe the definition for price is too restrictive. The Department is seeking comments as to what types of securities will be allowed to cross-trade. The current proposal limits these securities to equity and fixed income securities that have readily available market quotations from an independent source. Equity securities are further limited to those that are widely held and actively traded. We recommend broadening the definition of allowable securities from actively to publicly traded securities if the price is determined as discussed in the Investment Company Act Rule 17a-7.
Funds are highly diversified into various asset classes and market sectors.
Increasing the world of allowable assets will yield even further reductions in transaction costs when, for example, the manager from time to time readjusts the fund to its predetermined benchmark index. Fair and accurate prices can be determined for all securities as long as this quote is obtained through an independent and reputable pricing source and as long as the price is acceptable to both funds. If the Department decides to restrict allowable securities only to those actively traded, we suggest that it further define actively traded. Specifically, we believe additional guidance is needed as it relates to fixed income securities. We disagree with this limitation and believe it imposes an unfair bias and cost burden.