Magazine article American Banker

NationsBank to Challenge Taboo with Like-Sounding Fund Name

Magazine article American Banker

NationsBank to Challenge Taboo with Like-Sounding Fund Name

Article excerpt

WASHINGTON -- Banks traditionally have steered clear of giving their mutual funds names that are close to their own because regulators discouraged it.

Today, NationsBank Corp. will challenge that taboo by uniting its 18 mutual funds, with $4.5 billion in assets, under a new banner: Nations Fund.

"It was lore that regulators would object to any mutual fund that got too close to the name of the bank involved," said Donald W. Smith, a partner at the Kirkpatrick & Lockhart law firm in Washington.

Regulators Didn't Object

The chief concern was insuring that bank depositors didn't mistake mutual funds for insured deposits.

But NationsBank said it heard no such objection from either the Office of the Comptroller of the Currency or the Securities and Exchange Commission after it told them of the funds' name change. The Federal Reserve Board, which forbids linking names, was not a factor because brokerage activities are in the subsidiary of a bank, not a unit of the holding company.

"Up to this point, they've had some real tight restrictions on that," said Gary Kohn, a lobbyist for the Independent Bankers Association of America.

As a result, most bank mutual funds bear names that refer only indirectly, if at all, to the parent bank. NationsBank's predecessors, NCNB and C&S/Sovran, called their fund groups the Hatteras Fund and Market Master, respectively.

Hatteras was a family of six funds. Market Master had 12.

Nondescriptive Fund Names

Most bank mutual funds' names are more fanciful or historic than descriptive. Fleet Financial Group has the Galaxy Funds; Citicorp, the Landmark Funds; Wachovia Corp., the Biltmore Funds; and Wells Fargo & Co., the Stagecoach Express Funds.

But other entrants - particularly state-chartered banks - have become bolder. …

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