Some 84 percent of fund board directors and executives said they believe that imposing short-term redemption fees -- penalties on early redemptions -- is an effective way to deter some short-term trading. But 69 percent of board members and 55 percent of fund company executives said they believe some investors will time the market regardless of the fees, a survey found.

The study, completed in July, was based on 154 telephone interviews with 57 independent board members, 44 interested board members and 53 fund executives, including presidents, chief compliance officers, chief executive officers and chief financial officers.

The survey was commissioned by PFPC Inc., a fund transfer agent and member of PNC Financial Services Group Inc. It was conducted by independent research firm Artemis Strategy Group.

Market timing, which entails rapid in-and-out buying of fund shares, can be harmful to long-term shareholders, but it's not illegal unless a fund explicitly says it doesn't permit such behavior. After an investigation unveiled in 2003, a number of fund companies paid fines, and some fund executives lost their jobs, with the disclosure of market timing at some fund groups.

The Securities and Exchange Commission's "redemption fee" rule, or rule 22c-2, was meant to help deter the practice and goes into effect Oct. 16. The rule doesn't require that fund companies impose redemption fees, but it does mandate that fund boards consider whether redemption fees should be imposed.

In addition, it requires that the intermediaries distributing funds -- such as broker-dealers or 401(k) plan administrators -- disclose to fund companies the information necessary to help them enforce trading restrictions, such as individual identity and transaction data. Previously, fund firms sometimes couldn't obtain such information because intermediaries traded on behalf of individuals through multi-party, or omnibus, accounts.

Some 78 percent of larger fund companies, those with more than $10 billion in assets, that responded to the survey, and 62 percent of smaller fund companies said they will impose a 2 percent redemption fee on market timers.

But "If market-timers are making 10 percent or 12 percent," said Peter Rigopoulos, senior vice president at PFPC, "they're willing to eat that 2 percent redemption fee."

Susan Sterne, an independent director for Vermont-based Sentinel Funds, said although market timers "will always search for a way" to trade, "that doesn't mean you can't try to stop it."

In addition to redemption fees, Sentinel and other fund groups have put measures in place that attempt to ensure that stocks are fairly valued, which makes timing difficult, she said. Market timers often try to capitalize on discrepancies in prices after mutual-fund net asset values are calculated; fair-value pricing seeks to reduce those discrepancies.