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SEC May Increase Oversight for Funds

Regulators will review creating a self-policing arm for the industry.

January 29, 2003|From Associated Press

Federal regulators will consider new rules to tighten internal controls within mutual fund companies and will open to public review the idea of creating a self-policing organization for the powerful mutual fund industry.

News on Tuesday of the planned actions by the Securities and Exchange Commission came less than a week after the SEC voted, over industry objections, to force mutual funds to tell investors how they voted on decisions at the companies whose shares they hold.

The SEC said it was putting the new issues on the agenda for a meeting Tuesday of its five commissioners.

The mutual fund industry has in the past opposed the idea of a self-policing arm, which potentially could bring stricter oversight for mutual funds than under current SEC regulation.

The SEC move appeared to take the mutual fund industry by surprise.

"The fund industry supports strong regulation in the interest of mutual fund shareholders," said John Collins, a spokesman for the Investment Company Institute, the industry's lobbying group. "The fund industry will carefully consider the SEC's proposals."

Regarding SEC rules for internal controls, industry advocates have said most large mutual funds already have systems in place to ensure compliance with securities laws.

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