If the Financial Services Modernization Act of 1999 is enacted, mutual fund companies will buy insurance and banking companies while at the same time becoming acquisition targets of those same firms, industry consultants say. The bill would spur a race to offer clients a wide array of investment products, they say.

It would also permit banks to distribute and underwrite mutual funds themselves, saving them the cost of outsourcing these functions, they say. And this would lead to greater oversight of banks by the SEC, they say.

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