Signature Financial Group is claiming its first success in a campaign to get regulators to approve its distinctive approach to mutual fund distribution in Europe.

Last week, the Boston-based company said regulators in the United Kingdom have approved its plan to distribute versions of the same investment portfolios there and in the United States.

The approval, which came in the second quarter, paves the way for Signature to launch transatlantic funds by the end of 1995, said James B. Craver, senior vice president.

"It's probably the one application that has the most interest" of all of Signature's ventures, said the company's chief executive, Philip W. Coolidge.

Signature is privately held and does not disclose revenues.

Though the company is only six years old and has just 40 employees, it has become an influential fund distributor, with clients including Bankers Trust New York Corp., Chase Manhattan Corp., Citicorp, and J.P. Morgan & Co.

Signature administers $ 18 billion of mutual fund assets and has $35 billion in so-called huband-spoke mutual funds that are the core of its business.

With this arrangement, "spoke" funds, with different names, managers, and fees, share the same "hub" investment pool.

Signature has a patent on the software needed to run the structure, although State Street Boston Corp. has challenged the patent in court, and other companies, including PNC Bank Corp. of Pittsburgh, have similar arrangements.

The concept has been embraced in this country as a way to get other firms to sell a manager's funds.

Signature is betting that the hub-and-spoke concept will also play well overseas, especially with U.S. firms, which could use it to sell their funds to foreign investors.

Foreign Operations

To this end, two years ago Signature began distributing versions of U.S. mutual funds in the Bahamas, Cayman Islands, and Hong Kong.

These operations presently constitute about one-sixth of Signature's business.

To date, all the companies that use Signature's hub-and-spoke arrangement are banks -- namely, Chase, Citicorp, Morgan, and Swiss BankCorp.

Chase uses the hub-and-spoke structure to sell four of its American-based mutual funds in Hong Kong and the Bahamas, including versions of its popular Vista Capital Growth and Vista Grwoth and Income funds.

William A. Semmes, the bank's vice president for overseas funds, said Chase also plans to use the structure to offer some of its overseas funds to Americans.

"I think it's a process whose time has come," he said.

He predicted that Signature's European expansion will be well received by fund managers.

But moving beyond the U.K. could be tough.

Sources familiar with situation, who asked not to be named, said that foreign regulators see hub-and-spoke funds as a "Trojan horse" that could let American companies take over their country's mutual fund business.

They said that regulators are under pressure to ban the program to protect local banks and brokers.

"Regulators have been cautious," said William G. McBride, the overseas fund expert for mutual fund researcher Lipper Analytical Services, Inc., of Summit, N.J.

There are other concerns, too. For example, regulators are loath to let in funds based on investment pools in other countries, because it places the investments beyond their control.

It also has been suggested that hubs and spokes could endanger individual investors.

If, for example, a surge in redemptions hit a spoke sold to institutional investors, it could damage a central hub and the spokes sold to individuals, Mr. McBride said.

But Signature is pressing on, with requests for hub-and-spoke patents in more than 30 countries, in addition to those already granted in the United States and Taiwan, said Mr. Craver.

Global Aspirations

Signature Financial Group, which sells versions of U.S. funds in three other nations, had laid the groundwork to expand worldwide by:

* Opening offices in London, Grand Cayman Island, and Toronto

* Obtaining approval to sell versions of the same investment portfolios in the U.K. and U.S.

* Seeking patents in more than 30 countries for its "hub-and-spoke" fund structure.

Source: Signature Financial Group Inc.

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