Regulation

The SEC wants to divide responsibility between mutual fund boards and custodians for oversight of the foreign companies which keep possession and records of the foreign stocks and bonds mutual funds own.

The SEC last week brought its first action against a mutual fund adviser regarding preparedness for computer problems arising from the turn of the century.

BOSTON - A federal court judge here appears likely to substantially reduce and perhaps dismiss a lawsuit which challenges the independence of Fidelity Investments' mutual fund directors.

NEW YORK - The Securities and Exchange Commission is considering several amendments to the Investment Company Act to strengthen the role of independent directors of mutual fund companies, Paul Roye, the SEC's director of investment management, said last week. Roye spoke at a conference hosted by The Practising Law Institute of New York.

The mutual fund and securities industries are urging the SEC to delay and substantially revise proposed new rules which would set quality standards for transfer agents and broker/dealers.

For the first time, an SEC judge has set some limits on what expenses a mutual fund can include as part of its Rule 12b-1 fee.

The mutual fund industry has been slow to adopt the summary or "profile" prospectus in part because of a desire to make salespeople indispensable.

The Securities and Exchange Commission has added a calculator to its website that allows investors to determine the total costs of investing in any given mutual fund.

SEC examiners have begun informally questioning mutual fund companies on what their funds spend and receive for executing securities trades.

A recent agreement struck between "Big Five" accounting firm Deloitte & Touche and the SEC has captured the attention of both the accounting and mutual fund industries. At issue is just how far removed members of an accounting firm chosen to audit specific mutual funds must be to protect objectivity and maintain true independence.