Regulation

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.

WASHINGTON -- Some mutual funds are coming up short in their efforts to meet new Securities and Exchange Commission rules which require improved disclosure in fund prospectuses, said Paul F. Roye, the director of the SEC's Division of Investment Management last week.

The SEC last week proposed changes which it says will simplify the form which mutual funds use to close down a fund. The proposed changes will amend Rule 8f-1 of the Investment Company Act and Form N-8F. The industry has until Feb. 5 to comment on the proposal.

The Massachusetts legislature has approved and sent to Acting Gov. Paul Cellucci a bill which would make Massachusetts law essentially identical to federal law in defining what makes a mutual fund director independent. Both the state House of Representatives and the state Senate approved the bill last month, according to state records.

It will take more than high fees, from now on, to prove that an independent fund director is not independent.

The STI Classic Funds is on the verge of settling a portion of a class action lawsuit which it brought against Bollinger Industries, the exercise equipment manufacturer, and securities firms which participated in Bollinger's Nov., 1993 initial public offering.