Magazine article American Banker

Industry Cheers Passage of Uniform Standard for Fund Registration

Magazine article American Banker

Industry Cheers Passage of Uniform Standard for Fund Registration

Article excerpt

The financial services industry is applauding the Senate's unanimous passage Tuesday of a landmark bill that streamlines the registration of mutual funds.

The National Securities Markets Improvement Act of 1996, which the House passed late Saturday night, would replace a mishmash of state and federal requirements with uniform federal registration standards.

Mutual fund sponsors - including the roughly 100 banks that operate fund families - have long complained that the registration rules are labyrinthine and costly to observe.

"Mutual funds are a national product and will, appropriately, for the first time be regulated uniformly at the national level," said Matthew P. Fink, president of the Investment Company Institute, a Washington trade group.

Representatives of the banking and fund industries said the new rules would reduce inefficiencies, allowing players to focus on sales.

"I'm delighted," said Larry LaRocco, managing director of the American Bankers Association Securities Association. The legislation "represents a lot of hard work, reforms some very old statutes, and puts (banks) on an even footing in the marketplace."

Bankers said the measure would also make it easier for investors to understand the market.

Reducing costs and eliminating "duplicative functions ... and time delays works toward consistency, making sure that customers and prospects get the same information so they can make good comparisons," said Allen W. Croessmann, managing director of investment products at Bank of Boston Corp.

"I feel very strongly that duplicative regulation is a mistake and outmoded," he said, "and this is a step in the right direction. …

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