AT THE BELL

English only, SEC tells industry

Publicly traded companies and mutual funds will have to write in English rather than legalese when they file prospectuses with the Securities and Exchange Commission. The SEC adopted a rule last week requiring them to write the cover pages, risk-factor sections and summaries in the active voice, using short sentences and common words. Tables, charts and graphs are encouraged; legal jargon and multiple negatives are banned. An analysis by the commission shows the new rule would cost companies no more than $56 million.

Clinton affair could jilt bonds

The politically sensitive U.S. bond market is most likely to be spooked by the unfolding Interngate saga that has President Clinton and longtime ally Vernon E. Jordan Jr. fending off accusations of encouraging a former White House intern to commit perjury over allegations of an affair with Mr. Clinton. While the Dow Jones Industrial Average fell 1.6% in the days after the news broke – and leading Republican congressmen openly discussed the possibility of impeaching the president – the benchmark 30-year Treasury fell to its lowest level in three months, its yield rising to 5.95% Friday. “The bond market is sensitive to anything that might affect the currency,” says Peter Canelo, an investment strategist at Morgan Stanley Dean Witter Discover & Co. Still, considering that many investors are nervous about the historically high market here and currency collapses in Asia, the political scandal could have a bigger effect on the stock market if it creates “a lasting national leadership crisis,” says John Zaehringer, chief economist at Loomis Sayles & Co. in Boston. “It’s hard to know what kind of legs this controversy will have.”

No word yet on whether it will affect Mr. Jordan’s seats on the boards of Bankers Trust Co., American

Express Co., Dow Jones & Co. and eight other major corporations. Mr. Jordan, a powerful Washington lawyer, referred the former White House intern, Monica Lewinsky, t
o American Express for a public relations job. Apparently she didn’t make the cut. “We determined there was not a suitable opening,” says an Amex spokesman.

Royal deal may mean U.S. push

The planned merger of Canada’s No. 1 and No. 3 banks would make the new company one of the top 10 North American banks and could lead to a big splash in U.S. markets. The merger of Royal Bank of Canada and Bank of Montreal, announced Friday, could boost their U.S. retail investment presence, centered primarily on Chicago-based Harris Bankcorp, a Bank of Montreal subsidiary. Last year, Harris began a major retail push for its 17 Insight mutual funds, which have more than $6 billion in assets. The $26.1 billion merger of near-equals, the first deal between major Canadian banks in nearly 40 years, is subject to regulatory and shareholder approval.

Bond fund a Third Ave. first

Stock-focused Third Avenue Trust is entering the bond arena to the sound of clanging scrap metal. Martin J. Whitman, the New York mutual fund company’s chairman, filed a registration form with the SEC Friday to start the Third Avenue High Yield Fund. Managed by newly hired Margaret D. Patel, the fund will invest 65% of its assets in junk debt instruments.

SEC losing No. 1 enforcer

William McLucas, 47, the Securities and Exchange Commission’s director of enforcement for eight years, says he will leave within the next several months. He joined the division in 1977 and has run it longer than anyone else. “I just decided it was time to think about doing something else,” he says, although he isn’t sure what, possibly in a job that combines legal and business responsibilities.

Fidelity heading for coverage

Fidelity Investments’ bid to become the first company to guarantee some of its money market funds via its own insurance company is close to being approved. The funds would carry low levels of insurance issued by an affiliate to be organized in Bermuda and owned mutually by the participating funds, according to a proposal
filed with the SEC. The aim is to limit the risk of loss through credit defaults – “breaking the buck,” in fund lingo. Not covered would be interest rate risk or anything short of a default. If a hearing is not requested by Feb. 16, the SEC will allow Fidelity to go ahead with the proposal, first filed in May 1996.

Merrill’s marauders storm Hill

Merrill Lynch Chairman and CEO David H. Komansky has rounded up other big guns in the financial services sector to pressure Congress to enact long-awaited financial services reform legislation this year. The group met with leaders of the congressional effort at Merrill Lynch & Co. headquarters in New York last week. It also plans to write House Speaker Newt Gingrich, urging quick passage of a bill that would raze Depression-era firewalls between industries.