Trade Execution Activities and Forward Pricing

What this video covers

• How the Investment Company Act (ICA) forward-pricing rule assigns an open-end mutual fund order to the next-computed NAV, not the last NAV
• Why orders received before 4:00 PM ET generally receive that day's NAV, while orders received at 4:00 PM or later receive the next business day's NAV
• Why the execution price is unknown at order entry and why a representative cannot promise or quote a specific mutual fund price
• How an order moves from capture through principal review under the Financial Industry Regulatory Authority (FINRA) supervision rule and Written Supervisory Procedures (WSPs), then through the National Securities Clearing Corporation (NSCC) Fund/SERV system, confirmation, and trade date plus one business day (T+1) settlement
• How customer-initiated cancellation differs from as-of processing, and why the firm absorbs losses from its own execution errors
• How to distinguish late trading as fraud from market timing as a mutual fund policy or prospectus violation