The mutual fund industry is growing so rapidly that regulators may soon have trouble monitoring it adequately, the president of the Investment Company Institute warned last week.
Matthew P. Fink said that more of the registration fees that the Securities and Exchange Commission collects from mutual fund companies should be funneled into inspecting and regulating the business.
This would help head off problems, said Mr. Fink, whose Washington-based organization is the trade group for mutual fund companies.
Letter to Markey
"Mutual funds pay far more in fees than they get back in terms of regulatory oversight," Mr. Fink wrote in a May 18 letter to Rep. Edward Markey, D-Mass., who is chairman of the telecommunications and finance subcommittee of the House Energy and Commerce committee.
Of the $80.9 million in registration fees paid by mutual funds to the SEC in 1992, only $18.4 million was plowed back into regulating the business, Mr. Fink wrote.
Meanwhile, the Clinton administration is proposing to increase the registration fees paid to the SEC by investment companies to 1/24th of one percent of assets, from the current 1/32d of one percent.
Mr. Fink also said the regulatory apparatus has not kept pace with the rapid growth in mutual fund investments.
Fund assets grew 344% between 1982 and 1992, and now total nearly $1.7 trillion. But the SEC's division of investment management increased its staff by only 74% during the decade, he noted.