Regulation

New Internal Revenue Service accounting rules aim to reconfigure the way investors report gains and losses when they sell stocks and mutual funds by putting the burden on those who handle the transactions.

For years, Americans enjoyed the "wealth effect," the sense that their assets were gaining value rapidly enough that they didn't have to save much. This perception of ever-expanding prosperity gave them freedom to spend lavishly and enjoy life. The effect was a function of feeling wealthy as well as being wealthy.

WASHINGTON — Securities and Exchange Commission Chairman Mary Schapiro, speaking before the Investment Company Institute’ s General Membership Meeting, said she favors the creation of a council of existing regulators to oversee risk in the financial markets, rather than granting that authority to a single regulator.

WASHINGTON—At a separate summit on 401(k) reform during last weeks General Membership Meeting of the Investment Company Institute, Putnam Investments CEO Robert L. Reynolds called for sweeping retirement reform, beginning with mandatory automatic enrollment in qualified default options, savings escalation, the inclusion of retirement income options and full advice on asset allocation and retirement planning.

The Securities and Exchange Commission has filed fraud charges against the Reserve Primary Fund and its officers for failing to disclose the fund’s vulnerability to Lehman Brothers, as it filed for bankruptcy, instead falsely assuring investors that it would support the fund’s $1 net asset value.

The current regulation that allows hedge funds and other advisers with fewer than 15 clients not to register with the Securities and Exchange Commission is a “gap [that] doesn’t make sense,” said Andrew Donohue, director of the division of investment management, speaking before the Mutual Fund Directors Forum.

The Securities and Exchange Commission is considering better disclosures for target-date funds, particularly their glide paths and asset allocations, SEC Chairman Mary Schapiro told the Mutual Fund Directors Forum.

With more than nine in 10 shareholders reporting Internet access, the SEC's summary prospectus rule represents more than just an opportunity to provide an easier-to-understand document. The new rule provides a unique chance to refine the overall shareholder communication model.

Robert L. Reynolds loves a challenge. Without question, he certainly faces one. Trying to restore Putnam Investments' stature among America's top mutual fund companies after the firm's involvement in the trading scandal of 2003 and depletion of assets, now at $99 billion, a mere quarter of what they were in 2000-is a formidable task.

NEW YORK - Most financial transactions are dependent upon trust, but the last two decades of deregulation have eroded that trust and created a global crisis of confidence, according to experts who met last week at a global forum in the heart of New York's financial district.