Regulation

The Securities and Exchange Commission has granted its first no-action letter easing the personal holdings requirements for independent directors of a fund's investment advisor. The decision puts the SEC's treatment of independent directors of a fund's investment advisor on more equal footing with the independent directors of a mutual fund company.

Shareholders of Phoenix Investment Partners of Hartford, Conn. have filed a class-action lawsuit against Phoenix Home Life Mutual Insurance Company, charging its offer to buy out the firm is far undervalued.

In a rare but not unprecedented occurrence, the shareholders of a small fund are being asked to renew the fund's investment advisory contract, so that the advisor can be paid for the first time in nearly a year.

Transamerica Life Insurance Company of Canada fired three employees and suspended 17 in a trading scandal involving one of the firm's offshore funds based in Luxembourg, said Barry Francis, a spokesperson for the company.

The Investment Company Institute of Washington D.C., filed a motion July 28 to dismiss a complaint against it alleging the industry association has violated federal securities laws by aligning too closely with fund advisers, according to the motion.

The Securities and Exchange Commission has speedily adopted a rule to permit fund companies to continue to convey sales and marketing materials electronically - particularly on websites - to prospective investors without first supplying them with a prospectus or asking for their permission to provide the prospectus in electronic form.

The Orbitex Focus 30 Fund is hoping to file a countersuit against an individual who named the fund in an amended lawsuit filed earlier this year. A motion was filed July 13 in the 13th Circuit Court in Hillsborough County, Fla., seeking the court's approval to file the countersuit.

The U.S. Second Circuit Court of Appeals of New York ruled July 10 that broker-dealers do not have to disclose trailing payments received from fund firms. The court ruled that such fees are already disclosed in funds' prospectuses and statements of additional information.

Washington - Proposed Securities and Exchange Commission rules prohibiting independent auditors from providing other types of consulting services to their audit clients should be adopted, two mutual fund industry executives told the SEC last week.

The National Association of Securities Dealers Regulation posted guidance on its website July 21 about mutual fund and annuity advertising and suitability screening for multi-class mutual funds.