The Investment & Financial Services Association (IFSA) says new regulations will protect Australian investors from market timing and late trading problems that have undermined confidence in US mutual funds.

IFSA CEO Richard Gilbert says in a bulletin to members that the managed investment and superannuation regulatory regimes, under the Corporations Act, Superannuation Industry (Supervision) Act and Life Insurance Act, ensure that any scheme operator who allows late trading would be in breach of their duties and would face heavy penalties.

The bulletin from the peak body representing the managed investments, superannuation and life industries says new regulatory provisions make it “far more difficult for late trading and market timing issues to occur in Australia”.

“Australian law requires that scheme operators treat all investors equitably,” he said. “They must further ensure that these rigorous compliance procedures are actually working.”