Costs of doing business for US fund managers set to soar.

Publication: Europe Intelligence Wire

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COPYRIGHT 2004 Financial Times Ltd.

(From Funds International)

There could be tough times ahead for fund managers as the US Securities & Exchange Commission vows it will put the US funds industry under the spotlight as never before. Charles Davis reports As regulators continue to scan the US financial services landscape, the general consensus is that further regulation of mutual funds, separately managed accounts and other investment products is inevitable. The question is when will it all end, and at what cost to the funds industry?

Further regulatory scrutiny may well be the last thing the US funds industry needs given that it has already been weakened by poor performance in a protracted bear market and increased competition from alternatives such as managed accounts and exchange-traded funds. The regulatory pressure may spell the end of many smaller firms, which may be forced out of the business as revenue becomes increasingly harder to generate.

Since New York attorney general...

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