Florida Administrative Code › 19 - STATE BOARD OF ADMINISTRATION › 19 - Departmental › Chapter 19-11 - PROCEDURES FOR THE PUBLIC EMPLOYEE OPTIONAL RETIREMENT PROGRAM › Section 19-11.004 - Excessive Trading in the FRS Investment Plan

Current through Reg. 50, No. 138; July 16, 2024
(1) Excessive trading by Investment Plan
				members is prohibited. The United States Securities and Exchange Commission
				(SEC) has adopted Rule 22c-2. (17 CFR §
										270.22c-2.), regarding excessive
				trading for open-end mutual funds. Rule 22c-2 can be obtained by accessing the
				SEC website at sec.gov and clicking on the Regulation section. If the mutual
				funds determine that the member has engaged in excessive trading under the
				mutual funds' policies, the mutual funds are entitled to impose redemption fees
				or prevent trading that violates the mutual funds' excessive trading policies.
				It is the responsibility of the member to comply with the trading restrictions
				permitted by the SEC. Any applicable fees will be deducted directly from the
				members' accounts. Funds within the Self-Directed Brokerage Account ("SDBA")
				may have excessive trading rules that are applicable. However, these fund rules
				are separate and apart from the Investment Plan's Excessive Fund Trading
				Guidelines.
(2) Limitations.
(a) Foreign and global stock funds are
				subject to a minimum holding of seven (7) calendar days following any
				non-exempt transfers into such funds.
(b) All authorized investment funds, except
				for money market funds, stable value funds, and funds within the SDBA, are
				subject to the following controls:
1. Members
				who engage in Market Timing Trades (as defined in Rule
				 19-11.001, F.A.C.) in authorized
				primary funds will receive a warning letter sent by U.S. mail. The warning
				letter shall notify the member that excessive trades have been identified in
				the member's accounts and any additional violations will result in a direction
				letter and restrictions.
2. Members
				who engage in Market Timing Trades in authorized primary funds and who have
				previously received a warning letter described in subparagraph 1. above, will
				be sent a direction letter delivered by courier. The direction letter shall
				require that the member shall not have access to automated online trade
				instructions for at least one full calendar month following the date of the
				direction letter for all trades involving the primary funds. The member shall
				be required to conduct trades involving primary funds via telephone by
				contacting the Investment Plan Administrator for at least one full calendar
				month. "One full calendar month," in this context, means the full calendar
				month following the month in which the member engaged in a market timing
				trade.
3. Members who engage in
				Market Timing Trades and who have previously received a direction letter, as
				described in subparagraph 2., above, will be sent another direction letter,
				delivered by courier. This direction letter shall require that the member shall
				not have access to automated trade instructions for at least three full
				calendar months following the date of the direction letter for all trades
				involving the primary funds. The member shall be required to conduct trades
				involving primary funds via telephone by contacting the Investment Plan
				Administrator for at least three full calendar months.
4. Members who engage in Market Timing Trades
				and who have previously received a direction letter as described in
				subparagraph 3. above, will be sent another direction letter, delivered by
				courier. The direction letter will advise the member that the member will only
				be permitted to conduct trades involving primary funds via paper trading forms
				for at least three full calendar months following the date of the direction
				letter. The form to be used by the member in conducting the trades is the
				"Transfer Request Form, Excessive Fund Trading Violators," Form EFTPV-1, rev.
				06-18,
http://www.flrules.org/Gateway/reference.asp?No=Ref-14012
,
				which hereby is adopted and incorporated by this reference. The form will be
				sent to the member by the Plan Administrator with the direction letter. This
				form must be notarized and returned to the Office of Defined Contribution
				Programs, via U.S. mail, certified\return receipt requested. This form cannot
				be used to trade in, out or within the SDBA.
5. Members who engage in Market Timing Trades
				and who have previously received a direction letter as described in
				subparagraph 4. above, will be sent another direction letter, delivered by
				courier. The direction letter shall require that the member shall only be
				permitted to conduct trades involving primary funds via paper trading forms for
				at least twelve full calendar months following the date of the direction
				letter. The form to be used by the member in conducting the trades is the
				"Transfer Request Form, Excessive Fund Trading Violators," Form EFTPV-1, rev.
				06-18. This form must be notarized and returned to the Office of Defined
				Contribution Programs, via U.S. mail, certified\return receipt
				requested.
6. Members who engage in
				Market Timing Trades and who have previously received a direction letter as
				described in subparagraph 5. above, will be sent another direction letter,
				delivered by courier. The direction letter will advise the member that the
				member will only be permitted to conduct trades involving primary funds via
				paper trading forms for the remainder of any time that any balance exists in
				the member's Investment Plan account following the date of the direction
				letter. The form to be used by the member in conducting the trades is the
				"Transfer Request Form, Excessive Fund Trading Violators," Form EFTPV-1, rev.
				06-18. This form must be notarized and returned to the Office of Defined
				Contribution Programs, via U.S. mail, certified/return receipt
				requested.
7. If the member submits
				a transfer request form that is incomplete, the form will not be processed. A
				form is considered as "incomplete" if it does not contain the name of the
				member; does not set forth the social security number of the member; is not
				notarized; is sent by facsimile, email or regular U.S. mail; does not specify
				what fund(s), dollar amount(s) or percentages(s) are to be transferred; or does
				not indicate the fund(s) into which the amounts are to be transferred The form
				also will be considered "incomplete" if there are insufficent assets to execute
				the transfer(s), or if the requested transfer does not comply with the FRS
				Investment Plan Excessive Fund Trading Guidelines. Deficiencies are corrected
				through the resubmission of a transfer request form that is deemed to be
				complete.
8. Members who receive
				direction letters and who are placed on restricted trading within their primary
				funds, as provided in subparagraphs 2., 3., 4., 5., and 6., of paragraph
				(2)(b), shall be allowed to make automated trades in, out and within the SDBA.
				Any such member must meet the requirements of the SDBA as provided in Rule
				 19-11.013, F.A.C. Such member's
				activity within the SDBA is not subject to these guidelines, but will be
				subject to the applicable excessive trading rules and purchase restrictions of
				the funds in the SDBA.