Funds to Certify Portfolios’ Results

Mutual fund companies will be required to certify their portfolios’ financial results, just as corporate executives certify their companies’ results, the Securities and Exchange Commission decided Tuesday.

The SEC, charged with implementing the Sarbanes-Oxley corporate governance reform act passed by Congress in July, said it will require the principal executive and financial officer of every registered investment company--the technical term for mutual fund firms--to swear to the accuracy of their semiannual fund reports.

Mutual funds are required to report results twice a year, not quarterly, as regular corporations must do.

There was some uncertainty as to whether Congress intended to lump mutual funds in with regular companies on the issue of certification. The funds, regulated under a 1940 federal law, have enjoyed a relatively scandal-free reputation because of tight controls over how they operate.

The SEC decided to include funds in the certification process, but it also proposed technical amendments to the requirement, reflecting that funds operate under different rules than regular companies.

The SEC proposed a new form for fund companies to use in certifying results and asked for fund firms to include “a copy of any required shareholder report, and information regarding the company’s disclosure controls and procedures.”

The SEC asked for comment on the proposed amendments for 30 days.