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washington, d.c. - Although it is a vital part of the Investment Company Act of 1940, section 17, which prohibits transactions between affiliates, should be revised in order to allow greater efficiencies in the operations of mutual funds, according to fund executives.

TD Waterhouse Group of New York has introduced seven new proprietary funds, the company announced. The funds have no transaction fees and the minimum initial investment is $1,000, the company said. For subsequent investments, the minimum is $100.The funds cover various market sectors and asset classes.

AIM Management Group of Houston, Texas has announced that it has formed AIM Private Asset Management, a new subsidiary that will market customized portfolios to high-net-worth and institutional clients.

The Money Management Institute of Washington D.C. has taken exception to the Investment Company Institute's request that the SEC re-examine a rule that grants managed accounts an exemption to the Investment Company Act of 1940, according to a memorandum the Institute sent to its membership Aug. 29.

Two of the U.S.-domiciled funds of Julius Baer Group of Zurich will be among the first bank-sponsored mutual funds to register as investment advisers with the SEC as a result of new requirements in the Financial Modernization Act, according to SEC filings.

WASHINGTON, D.C. -SEC Chairman Arthur Levitt last month said the SEC would produce the "hard" evidence of auditing problems that Phil Gramm (R-Tex.), chairman of the Senate Banking Committee, called for to justify the commission's proposed independent auditor rules.

The Orbitex Group of Funds of New York last week introduced the Orbitex Life Sciences & Biotechnology Fund. Orbitex' first interval fund will invest in small- to mid-sized companies in the life sciences, pharmaceuticals, medical research and biotechnology research, development and implementation, the company said.

MaxFunds.com of Ann Arbor, Mich., a website that tracks small and new mutual funds, has launched 12 portfolios of securities that will be managed by investment professionals whose investment decisions will be available to consumers for a $2 monthly fee, said Jim Atkinson, president of MaxFunds.com.

The Bank of New York has completed the acquisition of Ivy Asset Management of Garden City, NY., the bank announced last week. The terms of the deal have not been disclosed.

Shareholders of the $27 million Matthew 25 Fund have voted down, by more than a five to one margin, a proxy proposal that would have required both inside and independent directors to invest at least $25,000 in the fund as a prerequisite to serving on the fund's board. (MFMN 10/2/00)

Firstar Corporation of Milwaukee has agreed to merge with U.S. Bancorp of Minneapolis through an exchange of shares valued at $21.2 billion, Firstar announced last week. The transaction, in which Firstar will exchange 1.265 shares of common stock for each share of U.S. Bancorp common stock in a tax-free exchange, is expected to close in the first quarter of 2001, Firstar said.

Washington, D.C. - The SEC should consider regulating products like separate accounts and hedge funds under the Investment Company Act of 1940 because they are increasingly available to the average investor who perceives them as a type of mutual fund, according to industry leaders.

Of the ten new streetTRACKS exchange-traded funds introduced this month, one in particular has caught the fund industry's attention for its ground-breaking nature.

Online banking will soon no longer be the only means of paying bills over the Internet. At least two mutual fund companies are now building the capabilities to allow investors to pay bills online from their money market fund accounts.

Fidelity Investments of Boston and American Century of Kansas City, Mo. both announced last week that in light of the Electronic Signatures Act taking effect on Oct. 1, they would accept new applications online, without handwritten signatures of any kind. Neither firm is requiring signatures, either at the time of an account opening or later, on hard copies via fax or the mail.

MutualFunds.com of Boston is selling its domain name. The sale is part of a reorganization of the Internet start-up, which was originally founded as a mutual fund site to provide a wide variety of services to the industry, according to Abe Gorelick, senior vice president of marketing at MutualFunds.com. The 20-person company will now focus on providing online education and training for the financial services industry.

Acorn Investment Trust, a series of five no-load funds were to become load funds Sept. 29, at the same time the sale of the funds' advisor, Wanger Asset Management of Chicago, to Liberty Financial of Boston was to close, said Marilyn Morrison, a spokesperson for Wanger Asset Management.

Two fund groups whose advisers are owned by Irish Allied Bank of Dublin, Ireland have merged. Four funds offered by Govett Funds of San Francisco have been merged into four funds offered by ARK Funds of Oaks, Pa., the companies announced last week.

Mutual fund firms are considering offering hedge funds and related products in order to prevent portfolio managers from leaving to work for existing hedge funds, said industry executives.

NEW YORK - While exchange-traded funds are expected to grow rapidly in the near future, their growth will be hampered by numerous obstacles.