From Sarbanes-Oxley reforms to anti-money laundering rules to the USA PATRIOT Act, the rate of regulatory change within the investment management industry has dramatically increased over the last several years. Mutual fund managers now find themselves dividing their time between meeting the requirements of new laws and maintaining their primary focus of managing and growing assets.

The Securities and Exchange Commission's Rule 38a-1, also known informally as the compliance rule, is one of the most important regulations recently enacted to protect the interests of mutual fund investors. In December 2003, the SEC adopted Rule 38a-1 under the Investment Company Act of 1940 and required mutual funds to be in compliance with the new rule by Oct. 5, 2004.

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