Surety Comments on Securities and Exchange Commission Regulations on Mutual Fund Trading Activity

Surety, LLC, a leading provider of data integrity services, today announced that it has submitted a comment letter to the Securities and Exchange Commission (SEC) in response to new regulations on mutual fund trading activity. The regulations require that companies provide tamperproof evidence that share trades occurred prior to the 4:00 p.m. EST market close each day.

In the letter, Surety recommends that the SEC adopt standards required under Rule 22c-1, specifying that time-stamp and transaction integrity at least meet the minimum criteria of being unalterable, unforgeable, permanent and independently auditable. Surety also strongly urges the SEC to consider mandating these minimum criteria to ensure the integrity of the time deadline by which transactions must be entered in order to receive the fund’s current day price.

“Unfortunately, many late traders routinely circumvent established system controls designed to prevent alteration and tampering of electronic records, leading the SEC to take aggressive action against these abuses,” said Tom Klaff, CEO of Surety. “By establishing these minimum criteria for ensuring the integrity of electronic records, companies can validate the transaction time and content of their transactions and the issues of late trading will be a thing of the past.”

Surety’s AbsoluteProofSM data integrity solution enables companies to easily comply with the new regulations by providing them with intelligent time-stamping and digital notarization that can independently prove the creation date, content, and sequence of any transaction. Using this technology, mutual fund companies, securities firms and banking institutions can generate irrefutable evidence of exactly what electronic records were created and precisely when. As a result, securities firms and regulators can validate the authenticity of electronic records and establish that files were created when claimed and not altered since.

The full text of Surety’s letter to the SEC can be found at: http://www.surety.com/docs/Surety_SEC.pdf.

Contact: Jayson Schkloven
Merritt Group (for Surety)
703-556-6823

Posted: Wednesday, February 11, 2004