Regulation

The shareholder who is suing Fidelity Investments, contending that the mutual fund industry has not passed along to investors the reduced costs which economies of scale bring, owns funds whose expenses have decreased as a percentage of assets, Fidelity says.

In its continuing effort to compel the securities industry to be ready technologically for the turn of the century, the SEC last week said it filed charges against nine transfer agents for allegedly failing to report their Y2K preparedness on new SEC forms.

NASD Regulation (NASDR) has dropped plans which would have required some firms to provide more warnings when selling mutual funds, a proposal which the mutual fund industry had opposed.

Mutual fund companies are increasingly using federal patent and trademark law to help brand and protect their products and services.

The SEC late last month sanctioned the Colorado investment advisory firm which sponsors the ICON Funds for using "inflated" figures in describing the firm's private account performance.

Tocqueville Asset Management is the latest interim fund adviser to feel the heat as fund trustees increasingly flex their mutual fund governance muscles.

Regulators have stepped up pressure in recent weeks on mutual fund companies and those who sell funds regarding their costs and disclosure of those costs.

The SEC has sued a former money market fund portfolio manager for fraud, saying he misled investors about the value of derivatives he purchased for the funds.

SEC examiners will conduct special audits - possibly as early as next month - of mutual fund companies and other investment advisers who may be having trouble meeting year 2000 programming targets.

Mutual funds seeking to reclaim assets from overseas companies which default on bonds may enjoy a moral victory but little financial satisfaction from an anticipated U.S. Supreme Court decision.