The ability to conduct innovative research, which is often the selling point for independent mutual fund firms, would be squashed if the Investment Company Institute’s proposal to curb soft dollars is ratified, an executive from Mellon Financial subsidiary Dreyfus Corp. told The Wall Street Journal.

Stephen E. Canter, chairman and CEO of Dreyfus and vice chairman of Mellon, said the ICI’s suggestion – specifically that computers and software from outside vendors and stock research products not be purchasable with soft money - would benefit large firms and harm smaller mutual funds.

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