It is too early to speculate what impact Harvey Pitt, President Bush's designee for chairman of the Securities and Exchange Commission, will have on the mutual fund industry. Those assessments will only come after the corporate lawyer begins to take action on what will be a full agenda, according to analysts.

The White House announced the selection May 10. A formal nomination is expected soon. The nomination is for the remainder of a five-year term expiring June 5, 1003, according to Ari Fleischer, a White House spokesperson. Following the nomination, Pitt, a Republican, would have to be confirmed by the Senate.

"The President believes that [he] should and will be [confirmed]," said Fleischer. There is little doubt of the confirmation, according to Chris Wloszczyna, a spokesperson for the Investment Company Institute of Washington, D.C.

Pitt would replace Laura Unger, who is acting as temporary chairman following Arthur Levitt's resignation in February. Pitt is currently a corporate partner with Fried, Frank, Harris, Shriver & Jacobson of New York. He has offices in both New York and Washington, D.C., and is chairman of the Washington office, according to the firm. Becoming SEC chairman would mean a return to the SEC for Pitt, who served on the commission from 1971 to 1978, according to Fried, Frank. In that time, Pitt served as special counsel of the office of the general counsel of the SEC, chief counsel to the SEC's division of market regulation, executive assistant to former SEC chairman Ray Garrett Jr., and, most recently general counsel of the commission, according to the firm.

After leaving the SEC, Pitt's clients included the ICI and the New York Stock Exchange, according to Fried, Frank. He is president and founding trustee of the Securities and Exchange Commission Historical Society of Washington D.C., chairman of the San Diego Securities Regulation Institute, and a member of the legal advisory board for the National Association of Securities Dealers of Washington, D.C. In 1977, he received the SEC's distinguished service award.

Many industry participants are withholding judgment on the appointment, at least publicly, until he takes office.

"We're just not commenting on it yet," said Wloszczyna, of the ICI. "It's early."

"I really haven't heard any reaction yet," said Russ Kinnel, an analyst with Morningstar.

It may be too early to know what his initiatives will be, but he is an excellent choice for investors, the financial industry, and the mutual fund industry, according to Marianne Smyth, who worked with Pitt at the SEC from 1976 to 1977, and who later became director of the SEC's division of investment management. Currently, Smyth is head of the investment management practice at Wilmer, Cutler & Pickering of Washington, D.C.

"The thing about Harvey is that he's very, very smart and he's well experienced in the securities world," said Smyth. "He has represented the Investment Company Institute on occasion and he is certainly familiar with investment company and mutual fund regulation. Although I don't think he would call himself a fund lawyer or specialist in that, I think he's going to be an open minded, very smart, a very far-seeing person when it comes to fund issues and how they relate to investor protection, but also how they relate to capital formation."

Pitt is likely to get involved first in issues such as the frequency of portfolio disclosure as well as in the potential regulation of alternative products, something that the ICI has asked the SEC to do, said Kinnel.

"The industry doesn't like seeing things like hedge funds on one side and folios on the other running fund-like products in a much less regulated and therefore less costly manner," said Kinnel. "That's definitely an issue that I think will end up on [Pitt's] plate."

One thing to look for is how the new chairman will handle recent initiatives of Levitt, who was known as an investor friendly chairman, said Kinnel.

"The SEC has already made strides in going a little further to protect investors interests when it comes to ads and I think that's great" said Kinnel. "I hope they go further now. In the last two or three years, the SEC has established some good things for [Pitt] to work on, and I think there are other issues that could potentially come up, for instance, greater disclosure, fund manager compensation and things like that."

However, Smyth said Pitt is likely to support weakening some regulations recently imposed on fund companies.

"With respect to funds, there has been a lot of unnecessary regulations, unnecessary rules developed recently and not all of them are crucial for the protection of investors," she said. "They just add cost and add burdens without doing much good. I know that the Hill is mentioning a thorough review of the [Investment Company Act of 1940]. My guess is that Harvey will be very alert to the opportunity to have the commission be of assistance in aiding that project. Of course, this is just a guess."

In 1999, Pitt represented New Frontier Media of Boulder, Colo. in the company's effort to keep its NASDAQ listing after stock sales that might have broken NASDAQ rules were reviewed, according to a filing with the SEC. New Frontier specializes in "the electronic delivery of adult entertainment," according to the company. That is not something that should stand in the way of Pitt's nomination or confirmation, according to Smyth.

"He was hired to help deal with NASDAQ issues" she said. "Somebody else can deal with the first amendment issues. He wasn't hired to either defend or prosecute on that score and I don't think that should or will have any bearing at all."

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