SEC Backs Legislation Banning Product

WASHINGTON -- Securities regulators support legislation that would ban a kind of mutual-fund product chiefly sold to military personnel, The Associated Press reported.

In testimony prepared for delivery Thursday to the Senate Banking Committee, a Securities and Exchange Commission official said the SEC endorses legislation to prohibit sales of mutual-fund contractual plans, also known as periodic payment plans.

Lori Richards, head of the SEC's Office of Compliance, Inspections and Examinations, said the SEC has conducted a "sweep" examination focusing on these kinds of mutual-fund products, which are typically sold to military personnel. Richards said a second "sweep" by the SEC examined sales of all kinds of securities products to military personnel.

Richards said the SEC strongly agrees that Congress should adopt legislation to protect military service members from features of mutual-fund contractual plans that make these products "susceptible to abuses and misleading sales practices and excessive fees."

-- NYSSCPA.org News Staff

Posted on 11/17/05