Regulation

PALM DESERT, Calif. - The SEC expects to complete its assessment of trends in mutual fund fees and expenses by early this summer, said Paul Roye, director of the SEC's division of investment management. The SEC has completed compiling data for the study and now is working on how it will report the results, Roye said.

The Securities and Exchange Commission will hold a public roundtable on May 23 on investment advisors.

PALM DESERT, Calif. - The SEC might permit an exception to its two percent cap on redemption fees, allowing closed-end funds that are converting to an open-end structure to assess a redemption charge in excess of two percent, according to Paul Roye, director of the SEC's division of investment management.

PALM DESERT, Calif. - Regulators are increasing their scrutiny of mutual fund advertising in light of fund companies' heavy promotion of their 1999 mutual funds' performances.

PALM DESERT, Calif. - The SEC's proposal to require funds to report their after-tax investment performance may prove popular with investors, but it is far from a hit with mutual fund industry lawyers.

Investment Advisers of Minneapolis, Minn. has settled a lawsuit brought against it by a would-be purchaser of a private security the firm held in its IAI Growth & Income Fund, according to a source close to IAI. Terms of the settlement were not disclosed. The security is now in the process of being sold.

The money management industry had become an outpost for scoundrels in the 1930s.

Marianne K. Smythe, a partner in the law firm of Wilmer, Cutler & Pickering of Washington, is chairperson of the Mutual Funds and Investment Management Conference sponsored by the Investment Company Institute and Federal Bar Association being held this week in Palm Desert, Calif. Smythe is a former director and associate director of the SEC's division of investment management. She recently spoke with Mutual Fund Market News reporter Mike Garrity. An edited account of their conversation follows.

Pending legislation in the European Parliament of Luxembourg would allow mutual funds registered in one European country to automatically qualify for a pan-European "passport" that would allow them to sell throughout the European Union. If the bill passes, funds would no longer be required to register in each country. A vote on the bill is expected by late summer.

A federal district court judge has dismissed a lawsuit against T. Rowe Price Associates of Baltimore in which shareholders in the Rowe Price-Fleming International Stock Fund claimed they paid excessive fees. Fund lawyers said the decision provides new clarity about the minimum allegations a shareholder must make for an excessive fee case to be heard.