A distribution practice that was first tried in the annuity industry last year is about to migrate to mutual funds.

American Skandia Investment Services of Shelton, Conn., will ask shareholders later this month to approve an arrangement which it hopes will help finance mutual fund distribution without increasing expenses for the adviser or shareholders. Under the proposal, broker/dealers will rebate a portion of commissions they receive from American Skandia funds to an American Skandia affiliate, American Skandia Marketing.

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