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As the number of hedge funds continues to expand, the opportunities to short stocks is shrinking, MarketWatch reports. According to some estimates, the percentage of shares sold short on the New York Stock Exchange has doubled since 2000 to about $500 billion a year.

While the mutual fund industry has wrangled over, and largely resisted, the logistics and the estimated $617 million cost of complying with Rule 22c-2 for the past three years, funds should actually view the perceived regulatory onus in a new light: As a tremendous marketing opportunity.

The Investment Company Institute urged the White House Office of Management and Budget to reject efforts by the life insurance industry to include stable-value funds among default investment options available to employers who adopt automatic enrollment, Investment News reports. In March, the American Council of Life Insurers asked the OMB to disallow the Department of Labor proposal making lifecycle, balanced funds and so-called target-risk funds the only acceptable default options for employers who choose to adopt automatic enrollment. According to the DOL guidelines published last September, employers who chose to automatically invest employees in stable-value funds, a common practice among those who use automatic enrollment already, would not be granted safe-harbor protection against lawsuits from employees disappointed with their portfolio value. In last week’s letter ICI Chief Economist Brian Reid urged the OMB to stay the course and exclude stable-value funds from the safe harbor. Including them, he said “would be inconsistent with the purpose of measures enacted in the Pension Protection Act of 2006 to facilitate automatic enrollment and enhance the utility of 401(k) plans.” The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Top executives at A.G. Edwards’ regional arm, Edward Jones, insist that the privately held company will remain privately held, according to Dow Jones. “We’ve got every arrow in our quiver that we believe meets the needs of the individual investor,” said Managing Partner Jim Weddle. St. Louis-based A.G. Edwards last week announced it would be acquired by Wachovia Corp. for $6.8 billion. Weddle insisted his company has not been approached. “I haven’t been contacted, and I don’t want to be,” Weddle said. Last year, Edward Jones added about 550 advisers, bringing the nationwide total to about 10,525. Plans for 2007 include another 750 or 800 staff members. Edward Jones advisers work in offices of one or two in communities around the country. The company prides itself on its neighbor-like image, habit of hiring people entering second careers, and offers of straightforward products, veering away from hedge funds, derivatives and other alternative tools. Weddle said that the company still attracts a “fair share of high-net-worth clients,” although the target audience is really middle-class Americans. As for murmurings that Edward Jones might be the next big mergers and acquisitions headline, Weddle insisted he’s not being coy. “When you acquire or merge with somebody, you kind of get a compromise culture,” he said. “People know we’re a private partnership.” The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Boston-based FundQuest has created a service to help assist firms with the conversion of fee-based brokerage accounts to comply with recent court rulings. The U.S. Court of Appeals for the District of Columbia Circuit has recently ruled that firms operating fee-based brokerage accounts must move these to either an advisory account or traditional commission account. “There is a lot at stake for any firm with fee-based brokerage accounts,” said Bob Del Col, chairman of FundQuest. Due to this, “we have assembled a team with expertise in compliance, operations, technology, advisor training, and investment due diligence who can consult on a conversion plan and assist with operational execution to ensure successful account conversions,” he said. FundQuest has automated many processes to help firms with the transition such as an online creation of client agreements to facilitate straight-through-processing and electronic generation of investment policy statements.

A proposed plan to repay Janus investors whose holdings were affected by market timing would require two-thirds of them, those who are owed $10 or less, to actively seek compensation, Rocky Mountain News reports. An independent consultant who advised the Securities and Exchange Commission on the plan, University of Florida Professor Christopher James said that because the losses are so small, it doesn’t make sense to mail out checks to investors. About one-third are owed an average of 64 cents, and another 10% would get $28. Only 66 people would get $36,000. Although Janus paid $100 million in fines, James found that investors actually only lost $21 million, but the SEC is not going to reduce the fine. The plan is posted on the SEC’s website to give the public 30 days to comment. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Palo Alto, Calif.-based Kelmoore Investment Company announced a partnership with AMS Group, a distributor based in West Palm Beach, Fla., in an effort to double distribution efforts of Kelmoore’s separately managed account business. Until now, Kelmoore’s SMA sales efforts have been internal. This is not Kelmoore’s first partnership with AMS. “Working relationships are built on trust. Our clients trust us, and we need a team that we know and trust representing us in the field,” said Kelmoore CEO Ralph Kelmon. Kelmoore’s Traditional Strategy SMA is a blue-chip equity portfolio against which covered options are sold. New to the company’s offering are the Kelmoore Overwrite Account and the Kelmore PrincipalPlus Account. The Overwrite account usually starts with customers’ highly concentrated portfolios and diversifies them. The PrincipalPlus Account includes both equity and principal-protection bonds while offering access to cash. AMS’s role will be to explain to advisers how the programs work, and help then explain the function to clients. AMS Founder and CEO Richard A. Schilffarth said his company looks forward to the partnership, noting especially increased demand for covered options strategies that generate cash.

RBC Financial Group’s online investing business RBC Direct Investing is offering new lower-priced options to lure more do-it-yourself investors in Canada. Over 40 funds will be available solely at RBC Direct Investing as new Series D units, according to a preliminary prospectus filed by RBC yesterday. The units will be geared toward investors who want to include managed money as part of their portfolios, but perform investment research and make decisions themselves. The management fees will range from 60 basis points to 1.25% and have a minimum requirement of $10,000 in each fund. The units will be available July 3. “We’re excited to be at the forefront of this new move in self-directed investing” said Doug Coulter, president and CEO of RBC Direct Investing. “This pricing option should make RBC Funds even more attractive for investors who choose to manage their own portfolios.” The offer represents the first mutual fund fee structure in Canada from a major fund company that is tailor-made for the self-directed investor.

Both Franklin Templeton Investments of San Mateo, Calif., and Invesco of Atlanta have moved, or plan to move, some operations into the cosmopolitan Indian city of Hyderabad, the sixth-most populous city in India.

The NASD collected roughly half the amount of fines in 2006 compared to 2005, taking in $84.9 million in 2006, compared to $134.3 million in 2005, according to its annual report. The NASD issued another $75 million in fines in 2006, compared to $148.5 million in 2005.

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Regulation continues to weigh on fund executives' minds as their number-one concern, according to a PricewaterhouseCoopers survey of 400 senior finance executives at a forum last month.

When hedge funds, long known for their exclusivity and secret-sauce approach to investing, go public, it takes a lot of planning and some cultural adjustment, too, according to a web-based presentation hosted by Deloitte & Touche last week.

While the mutual fund industry has wrangled over, and largely resisted, the logistics and the estimated $617 million cost of complying with Rule 22c-2 for the past three years, funds should actually view the perceived regulatory onus in a new light: As a tremendous marketing opportunity.

Boomer Rollovers Not Expected to Hurt 401(k)s

CheckFree Names Keeling Senior Vice President

The investment management industry is always looking to make business more efficient, cut costs and comply with regulations. More firms are recognizing the key to helping with those issues might be outsourcing.

Three India-focused hedge funds have won awards for best-in-class at a prestigious fund awards ceremony in Singapore hosted by Eurekahedge, Asia Pulse reports.

At Wal-Mart’s annual meeting today, Whitney Tilson and Glenn Tongue, co-managers of the Tilson Focus Fund, plan to give management of one of their top holdings a piece of their mind, MarketWatch reports. And that’s to take a couple of pages out of the playbook of another one of their major holdings: McDonald’s.

Securities and Exchange Commission Chairman Christopher Cox says there is only so much that regulators can do to properly regulate the research still permitted to be bundled in soft dollars. Thus, he called on Congress on Thursday for an outright ban on the practice altogether, The Wall Street Journal reports.Congress began allowing soft dollars to be bundled in with brokerage commissions in 1975, with the goal of providing the buy side with research and tools to benefit investors. Last year, the SEC modified that to apply only to research, but some firms went further as to ask their brokers to unbundled the fees for research.