washington, d.c. - Although it is a vital part of the Investment Company Act of 1940, section 17, which prohibits transactions between affiliates, should be revised in order to allow greater efficiencies in the operations of mutual funds, according to fund executives.

"Section 17 of the 1940 Act is premised on the notion that all transactions between a fund and its affiliates are prohibited unless there is an exemption that is given or a rule that is given," said Robert C. Pozen, president of Fidelity Investments of Boston, at an SEC conference here earlier this month.

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