MORGAN LEWIS ON ECURITIES S A NEWSLETTER FROM THE SECURITIES PRACTICE www.morganlewis.com FALL 2004 A YEAR IN TURMOIL FOR MUTUAL FUNDS — IN THIS ISSUE VIEWS OF AN INDUSTRY INSIDER BY THOMAS S. HARMAN Amid the frenetic backdrop of regulatory catch-up and leap-frog in the mutual fund industry over the last year, it 2 OUTSIDE DIRECTORS AND is important to step back and observe the larger trends and try to discern what has fundamentally changed. That RED FLAGS involves focusing on the industry’s primary regulator, the SEC. OBTAINING A LISTING ON Initially outflanked by New York maintained. It has adopted signifi- 3 THE LUXEMBOURG STOCK Attorney General Eliot Spitzer, the cant revisions to substantive rules, EXCHANGE SEC has responded vigorously to e.g., Rule 12b-1, to prohibit the alleged abuses in the Mutual Fund practice of tying portfolio execution EXPANDED NEW FORM 8-K Industry. It has employed virtually to fund distribution, and Rule 22c- 4 REQUIREMENTS BECAME all of its tools: information-gather- 1, the forward pricing rule, a EFFECTIVE IN AUGUST ing, jawboning, disclosure fundamental bulwark of the rulemaking, rulemaking that For further information, or to receive Investment Company Act of 1940. MORGAN LEWIS NEWS reshapes business practices, corpo- this newsletter by e-mail only, contact It has even proposed a rule that 11 rate governance rulemaking and David Sirignano at 202.739.5420 or would require funds to impose a 2% enforcement actions. The enforce-
[email protected], who redemption fee on certain short-term focuses on SEC regulation, or ment actions, notably, often investors.