Controlling Hot Money

by Robert C. Pozen

Abstract

The manager of the Japan Equities Fund is faced with an increase in "hot money" moving quickly in and out of the Fund. This short-term trading is an attempt to take advantage of the difference between the closing times of the Tokyo and New York Stock Exchanges. The CFO of the fund manager considers the various strategies available to limit such short-term trading, which will be presented soon to the Fund's board of directors.

Keywords: Stocks; International Finance; Investment Funds; Governing Rules, Regulations, and Reforms; Market Timing; Market Transactions; Financial Services Industry; New York (city, NY);

Format: Print

16 pages

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Citation:

Pozen, Robert C. "Controlling Hot Money." Harvard Business School Case 311-022, December 2011. (Revised from original July 2010 version.)