Practice

The Securities and Exchange Commission is considering allowing fund companies to shorten their bi-annual shareholder reports, according to a spokesperson for the SEC.

Waddell & Reed of Overland Park, Kan., will add two new share classes to its Waddell & Reed fund family in order to target supermarkets, 401(k) plans and wrap programs, the company announced last week.

A bill introduced in the House of Representatives would exempt from federal taxes up to $3,000 in mutual fund capital gains fund investors must accept even though they have not sold their fund shares. For investors filing joint returns, that exemption would be doubled to $6,000.

The SEC's final privacy regulation substantially departs from its initial proposal and allows fund companies to issue shorter, more general privacy statements than they originally would have had to, industry attorneys said.

The SEC is considering delaying revisions to the principal form investment advisors must file concerning their business practices because of objections raised to the proposed revisions.

The SEC has proposed new rules to protect auditor independence that will place new responsibilities on mutual fund companies.

The SEC has charged Founders Asset Management LLC of Denver with defrauding its clients in a soft-dollar arrangement with an investment advisor, according to an SEC filing. The commission has issued $790,000 in fines against the firm and Bjorn Borgen, its former president.

NEW YORK - While there are no clearly defined compliance standards for best execution trade practices, firms that do not use electronic commerce networks to conduct any of their trades raise SEC concerns, according to an SEC official.

BOSTON-The SEC is concerned that increasing competitive pressures the mutual fund industry faces could lead it to engage in misleading or overly aggressive advertising, said Paul Roye, director of the SEC's division of investment management.

A suit charging that New York Life Insurance Co. breached its fiduciary duty as a sponsor to two pension plans and two 401(k) plans, is entirely without merit, the company said in a statement issued prior to the suit's filing.