Beginning next Monday, funds will begin complying with a new Securities and Exchange Commission requirement that they must disclose how they structure portfolio managers' compensation and how much these fund skippers have invested in the funds they oversee. Funds that launch after Feb. 28 must disclose the information in their registration documents, while existing funds must report the information in their annual prospectuses. The SEC rule aims to better align managers' interests with those of long-term shareholders. But the rule has its share of dissenters within the industry. James Riepe, vice chairman of T. Rowe Price and chairman of the Investment Company Institute, said the rule suggests that a portfolio manager or fund analyst only cares if they "have a significant investment in that fund." A few firms have started linking managers' pay to performance, including Janus Capital, which starting Jan. 1, is now tying portfolio managers' bonuses to one- and three-year performance.

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