ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Wednesday, October 2, 1996             TAG: 9610020035
SECTION: BUSINESS                 PAGE: B-8  EDITION: METRO 
DATELINE: WASHINGTON
SOURCE: Associated Press

SENATE APPROVES MUTUAL FUND BILL LEGISLATION CUTS RED TAPE AND STREAMLINES REGULATION

A major bill to streamline mutual fund regulation, sharply cut fees on stock offerings and eliminate overlapping regulation of the stock markets won final Senate passage Tuesday.

By a voice vote, the Senate approved the National Securities Markets Improvement Act of 1996, sending the bill to President Clinton for his signature. The bill, which had broad bipartisan support, was approved by a voice vote in the House on Saturday night.

``This bill cuts through the unnecessary bureaucratic red tape that currently impedes savings and investment and makes it easier for business to grow and investors to save,'' Sen. Chris Dodd, D-Conn., said in a statement.

The bill's central feature would give the Securities and Exchange Commission sole jurisdiction over registering sales of mutual fund shares and remove state securities regulators from overseeing such sales. The change is expected to save mutual funds millions and reduce their cost of selling shares.

It's unclear how much of the savings will be passed on to consumers.

The bill also gives the SEC additional authority to inspect books and records of mutual funds, and requires funds to disclose additional information to investors. Deceptive mutual fund names are prohibited.

Sponsors called the bill the biggest changes in mutual-fund regulation since 1940.

While the bill eliminates overlapping SEC and state regulations, its pre-emption of state law isn't as broad as earlier versions. States retain the right to oversee stock sales of small companies with assets less than $10 million.

The bill also seeks to improve regulation of the nation's 22,500 investment advisory firms and the 150,000 professionals who dispense retirement planning and investment counsel to the public. This business has grown rapidly, but the SEC admits it can inspect the smaller companies only once every 44 years.

Another compromise in the bill gives states authority to license all individual investment advisers. The SEC and states will split inspection and examination duties, with the SEC handling companies with more than $25 million in assets.

LENGTH: Short :   49 lines