Palm Desert, Calif. - The occasional practice of mutual fund directors serving on more than one fund complex poses troubling conflicts that are best avoided, according to two seasoned industry participants.

Merrill Lynch of New York prohibits fund directors from serving on Merrill Lynch funds at the same time they serve on the boards of other fund complexes, said Philip Kirstein, general counsel for Merrill Lynch Asset Management of Princeton, N.J. The potential for conflict, in fact, is so troubling that Merrill Lynch will not permit a fund director to serve on the board of Merrill Lynch funds at the same time the director also serves on the board of an insurance company, a bank or another broker/dealer, Kirstein said.

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