Regulation

After years of the court system siding with the mutual fund industry on the discrepancy between retail and institutional mutual fund fees, the case that the Supreme Court will hear this fall, Jerry N. Jones et al. v. Harris Associates, might be a watershed one for investors.

The Federal Reserve Thursday extended a number of emergency funding facilities from the end of October until Feb. 1, including an asset-backed facility for money funds, the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility.Other extended programs are the Commercial Paper Funding Facility, the Primary Dealer Credit Facility and the Term Securities Lending Facility. Along with this, the Fed is extending swap lines with other central banks through Feb. 1, citing the continued strain on many capital markets. "Conditions in financial markets have improved in recent months, but market functioning in many areas remains impaired and seems likely to be strained for some time," the Fed said in a statement.

Hedge funds must reshape themselves to regain investors’ trust and continue to grow, speakers at the Managed Funds Association Forum this week said.

The Securities and Exchange Commission met Wednesday to discuss various changes to money market funds to safeguard them from another “run on the bank” like what happened last September with the Primary Fund.

The Financial Industry Regulatory Authority is asking brokers and registered investment advisers to provide it with information on the sale of leveraged and inverse exchange-traded funds between Oct. 1, 2008 and March 30 to investors who held them for 10 business days or longer. The authority is looking for all sales and marketing materials, customer communications and complaints, arbitration claims and written supervisory procedures regarding the sale of such funds.

While the financial services industry largely embraced most of the Obama administration's financial services overhaul, the idea of removing money funds' $1 net asset value is causing widespread concern in the mutual fund industry.

The Financial Industry Regulatory Authority has fined seven firms a total of $184,500, including $80,000 for Tulsa-based BOSC Inc., for failing to timely or accurately report municipal securities, unfairly pricing bonds, as well as other muni and non-muni rule violations.

At the hearing on target-date funds that the Department of Labor and the Securities and Exchange Commission held in Washington last Thursday, the focus was on better disclosure of holdings.

WASHINGTON - Many investment industry leaders are worried that the proposed 401(k) fee disclosure regulations currently being pushed through Congress will actually increase the fees investors pay and increase their confusion.

UAT Inc. has developed a 401(k) tool for sponsors offering target-date funds that will allow them to scrutinize the holdings and glidepath of the funds.