The Securities and Exchange Commission has been soft-pedaling its expectations for mutual fund chief compliance officers recently in an effort to alleviate concerns that its new compliance rule would effectively make them a junior police squad for the regulatory agency.

The compliance rule enacted last October requiring mutual funds to appoint a chief compliance officer was aimed at rooting out compliance issues and conflicts of interest before they become a quagmire. The SEC has talked tough about the CCO being on the hook for abusive practices, lax internal controls and potential fraud cases within a fund complex as part of its new regulatory agenda in the wake of the recent market-timing and late-trading scandals.

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