Regulation

The Massachusetts Securities Division has charged a Denver broker/dealer with scaring elderly people into abandoning their securities in favor of annuities with outrageous commissions.

PALM DESERT, Calif. - Outdated and risky in this age of accounting scandals plaguing Wall Street. That is how a fund consultant and author described the fund industry's model for reviewing corporate reporting. To stave off future legislation, a new model is needed, the speaker told the 700 fund accountants gathered here last week at the Investment Company Institute's Tax & Accounting Conference.

The backlash against corporate secrecy spilled over into the usually clean mutual fund industry as the Securities and Exchange Commission took a first step last week in requiring mutual funds to disclose their proxy voting policies and votes.

The Securities and Exchange Commission's proposal to require publicly traded companies to reveal their so-called critical accounting policies is a step in the right direction, according to leading fund companies.

Joseph Carrier, vice president and treasurer of the T. Rowe Price Funds, weighed in on a number of subjects concerning the industry during a recent interview with Mutual Fund Market News Associate Editor Chris Frankie. Carrier, chairman of the Investment Company Institute's Accounting/Treasurers Committee, also spoke about some of the topics to be discussed at the ICI 2002 Tax & Accounting Conference in Palm Desert, Calif., this week.

Changes to Illinois tax law may make the state's 529 college savings plan more attractive to Illinois residents, but they could also inspire other states to try to get residents to favor their in-state 529 plans. If that happens, fund companies that have established a 529 footprint in one state may have to scramble to form alliances with multiple states to get them into their plan.

The mutual fund industry is balking at a proposed new Securities and Exchange Commission rule that would require top executives to personally sign off on each of their funds' annual and semi-annual reports.

A mutual fund advisor that has outspokenly bemoaned the corporate scandals plaguing Wall Street this year, even put its weight behind the movement to leverage fund assets to pressure public corporations into reform, has been fined by the Securities and Exchange Commission for improper disclosure.

Shortly after the Securities and Exchange Commission decided to require top executives of mutual fund companies to certify their firms' financial reports, the commission proposed in an open meeting last week to extend the rule to shareholder reports, as well.

Expensing options could be expensive. While fund industry leaders are calling for uniform expensing of options, some fear such action could drag corporate earnings down by 23% or more. And with the markets as ugly as they have been, now is not a good time to risk further losses, opponents to regulation say.