WASHINGTON - The days of the SEC's five-year examination cycle are over, as more stringent oversight has set forth a new regime under which mutual fund chief compliance officers must keep their heads on a swivel.

In keeping with marching orders from Chairman William Donaldson, the Commission will no longer operate as a reactionary, predictable regulatory agency but rather, it will implement an entirely new approach to oversight. Perhaps the biggest change is that the SEC will be "far less predictable" in its examination of mutual fund shops, said John Walsh, Chief Counsel of the SEC's Office of Compliance, Inspections and Examinations.

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