Two of the U.S.-domiciled funds of Julius Baer Group of Zurich will be among the first bank-sponsored mutual funds to register as investment advisers with the SEC as a result of new requirements in the Financial Modernization Act, according to SEC filings.

As a result of the act, banks will have to register as investment advisers with the SEC beginning May 2001.

In order to comply with the new legislation, Julius Baer has formed a new investment adviser, Julius Baer Investment Management, for two of its funds, the Julius Baer Global Income Fund and the Julius Baer International Equity Fund, according to an SEC filing. In an Oct. 25 letter, Julius Baer will ask shareholders of these funds to vote to replace Bank Julius Baer New York in January 2001 as the investment adviser with this new entity to be registered with the SEC, according to the filing.

The bank is telling shareholders that the terms of the new advisory agreement, including fees, are identical to how the funds are being run now. Requiring banks offering mutual funds to register as investment advisers with the SEC will simply give the commission clearer records of bank mutual funds, industry attorneys said.

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