Practice

The Securities and Exchange Commission rule regarding fund investments' adherence to a fund's name, rule 35d-1, will take effect March 31. The rule imposes new requirements on the use of potentially misleading or deceptive fund names. Under the rule, investment companies will be required to have 80 percent of the assets of a fund correspond with the name of the fund. The standard had been 65 percent.

Young adults under 35 who have retirement accounts with Fidelity Investments of Boston are well prepared to meet their retirement needs. On average, if they sustain their current savings rates, they are likely to cover 124 percent of their retirement needs. However, those 35 and over are likely to fall short. If they sustain their current savings rates, those in the 35 to 50 age group are likely to be able to cover only 60 percent of their retirements needs while those over 50 are likely to have enough to cover only 27 percent of their needs.

Rockies Fund, a business development company (a type of closed-end fund), and its president, Stephen Calandrella, were recently found to have falsely valued the fund's holdings and to have manipulated stock prices. In a decision handed down March 9, Judge Brenda Murray ruled that Calandrella had manipulated the price of the stock of a small costume jewelry store chain, Premier Concepts. Judge Murray also found Rockies Fund had overvalued the fund when it did not discount restricted shares of Premier Concepts stock the fund owned.

PALM DESERT, Calif. - The Securities and Exchange Commission may be searching for a new chairman, but that will not prevent it from pursuing new initiatives, including a new rule proposal it expects to issue by June 30, according to Paul Roye, director of the division of investment management for the SEC.

A growing number of 401(k) plan participants are seeking a brokerage option within their 401(k) plans, according to a soon-to-be released study conducted by Hewitt Associates of Lincolnshire, Ill.

Joel Goldberg is a partner in the New York office of the law firm of Swidler Berlin Shereff Freedman LLP of Washington, D.C. His clients include mutual funds and advisers. Before going into private practice in 1983, Goldberg was director of the division of investment management of the Securities and Exchange Commission. He will be moderating a panel on SEC inspections and enforcement at the Mutual Funds and Investment Management Conference co-sponsored by the Federal Bar Association and the Investment Company Institute this week in Palm Desert, Calif. Goldberg recently discussed the SEC and its enforcement issues and policies with Mutual Fund Market News reporter Andrew Greene. An edited version of their conversation follows.

John Capone, the chief accountant at the Securities and Exchange Commission, is leaving the SEC March 30 to become a partner with Arthur Andersen of Chicago, he said.

WASHINGTON, D.C. - Market volatility has quickly diminished some funds' returns and may require those funds to advertise more recent performance data than that of the most recent quarter's, said Doug Scheidt, associate director of the division of investment management of the Securities and Exchange Commission.

Fund Democracy, a shareholder advocacy group in Chevy Chase, Md., wants the Securities and Exchange Commission to tighten its policy on granting funds exemptions that remove shareholders' rights to vote on changes of sub-advisers and sub-adviser fees.

Defined contribution retirement programs have seen rapid expansion over the past decade. But, defined contribution business will be undergoing a slowdown, as alternative investment options increase, market returns decline, and retiring baby-boomers begin to remove assets, according to a study released last week by Strategic Insight, a mutual fund research and consulting company in New York, and NewRiver, an online financial service provider in Andover, Mass.