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A Securities and Exchange Commission rule initiative that was strongly criticized by consumer groups several years ago when it was first suggested has reappeared on the SEC's docket as part of an impending rule proposal expected by June 28.

The proposed merger of American General of Houston and Prudential PLC of London may be in trouble. When initially announced on March 12, the stock swap was valued at $49.52 per American General share. That equates to $26.5 billion based on the 10-day trailing average closing price of Prudential stock as of March 9. On word of the proposed merger, however, the price of Prudential shares dropped dramatically. Since the announcement, there has been considerable speculation by analysts as to whether the deal will be completed.

The Council of the European Union has approved legislation that would allow fund companies to sell in any European Union country, as long as the fund is registered in one of them.

Robeco Groep, a Netherlands-based independent asset management company, has agreed to purchase Harbor Capital Advisors of Toledo, Ohio from Owens-Illinois, a manufacturer of glass and plastic packaging, for up to $490 million in cash, Robeco Group announced last week. Harbor Capitol Advisors oversees the Harbor Fund family of mutual funds, as well as Owens-Illinois'

State Farm Insurance of Bloomington, Ill. has announced that it is offering mutual funds nationally. The company started offering mutual funds in January, in a pilot program in Missouri, North Carolina, Kansas and Virginia.

The Securities and Exchange Commission rule regarding fund investments' adherence to a fund's name, rule 35d-1, will take effect March 31. The rule imposes new requirements on the use of potentially misleading or deceptive fund names. Under the rule, investment companies will be required to have 80 percent of the assets of a fund correspond with the name of the fund. The standard had been 65 percent.

Young adults under 35 who have retirement accounts with Fidelity Investments of Boston are well prepared to meet their retirement needs. On average, if they sustain their current savings rates, they are likely to cover 124 percent of their retirement needs. However, those 35 and over are likely to fall short. If they sustain their current savings rates, those in the 35 to 50 age group are likely to be able to cover only 60 percent of their retirements needs while those over 50 are likely to have enough to cover only 27 percent of their needs.

Rockies Fund, a business development company (a type of closed-end fund), and its president, Stephen Calandrella, were recently found to have falsely valued the fund's holdings and to have manipulated stock prices. In a decision handed down March 9, Judge Brenda Murray ruled that Calandrella had manipulated the price of the stock of a small costume jewelry store chain, Premier Concepts. Judge Murray also found Rockies Fund had overvalued the fund when it did not discount restricted shares of Premier Concepts stock the fund owned.

PALM DESERT, Calif. - The Securities and Exchange Commission may be searching for a new chairman, but that will not prevent it from pursuing new initiatives, including a new rule proposal it expects to issue by June 30, according to Paul Roye, director of the division of investment management for the SEC.

When a roomful of mutual fund company executives at a recent industry conference was asked for a show of hands of those who had looked into running managed accounts as a means of growth for their respective companies, no one moved.

A growing number of 401(k) plan participants are seeking a brokerage option within their 401(k) plans, according to a soon-to-be released study conducted by Hewitt Associates of Lincolnshire, Ill.

Prudential PLC of London announced last week that it plans to buy American General Corporation of Houston for $22.3 billion.

Munder Capital Management, adviser to the Munder Funds, has announced the opening of the Munder Power Plus Fund, one of the first mutual funds focused on investing in technology for new sources of power.

Forum Funds of Portland, Maine has filed a preliminary prospectus with the Securities and Exchange Commission for the Shaker Fund, which would invest primarily in small and medium-sized companies and would be the newest fund in Forum's family of 19 funds. The family includes equity and municipal bond funds.

Joel Goldberg is a partner in the New York office of the law firm of Swidler Berlin Shereff Freedman LLP of Washington, D.C. His clients include mutual funds and advisers. Before going into private practice in 1983, Goldberg was director of the division of investment management of the Securities and Exchange Commission. He will be moderating a panel on SEC inspections and enforcement at the Mutual Funds and Investment Management Conference co-sponsored by the Federal Bar Association and the Investment Company Institute this week in Palm Desert, Calif. Goldberg recently discussed the SEC and its enforcement issues and policies with Mutual Fund Market News reporter Andrew Greene. An edited version of their conversation follows.

John Capone, the chief accountant at the Securities and Exchange Commission, is leaving the SEC March 30 to become a partner with Arthur Andersen of Chicago, he said.

WASHINGTON, D.C. - Market volatility has quickly diminished some funds' returns and may require those funds to advertise more recent performance data than that of the most recent quarter's, said Doug Scheidt, associate director of the division of investment management of the Securities and Exchange Commission.

Fund Democracy, a shareholder advocacy group in Chevy Chase, Md., wants the Securities and Exchange Commission to tighten its policy on granting funds exemptions that remove shareholders' rights to vote on changes of sub-advisers and sub-adviser fees.

Defined contribution retirement programs have seen rapid expansion over the past decade. But, defined contribution business will be undergoing a slowdown, as alternative investment options increase, market returns decline, and retiring baby-boomers begin to remove assets, according to a study released last week by Strategic Insight, a mutual fund research and consulting company in New York, and NewRiver, an online financial service provider in Andover, Mass.

PHOENIX, Ariz. - Insurance industry products and variable annuities in particular have always been targets for government revenue-raising measures due to their tax-preferred treatment, according to Stephen Zimmerman, a partner at Dykema Gossett PLLC of Washington D.C. As the new administration settles in, a panel of lawyers discussed legislative issues likely to arise that could affect the annuity industry at the National Association for Variable Annuities marketing conference held here last month.