Nov. 14, 2003 — Fidelity Investments said it has in-house policies to prevent predatory activities in its funds, such as market-timing and forward-pricing, in a response to the scandals that have engulfed the mutual fund industry.

In a letter to shareholders dated November 14, Edward C. Johnson III, the company’s chairman and chief executive officer, wrote “Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called “agreements” which would permit this illegal practice.”

Johnson noted that “Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee — which is returned to the fund and, therefore, to investors — to discourage this activity.”

Johnson added that while it applauds “well thought out” steps proposed by regulators, legislators and industry representatives to protect fund shareholders in the future from such practices, he remains “concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.”