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AN 'OPPRESSIVE AND COSTLY' BURDEN PLANNED FOR MONEY MANAGERS BY MORGAN AND GOLDMAN; THE ALLIANCE IN SUPPORT OF INDEPENDENT RESEARCH

 WASHINGTON, July 15 /PRNewswire/ -- Imposing a new layer of regulation on money managers using "soft dollars" for their trading commissions will be an "oppressive and costly" burden on money managers, The Alliance In Support of Independent Research said yesterday. The call for added regulation was put forward on Tuesday by executives of Morgan Stanley and Goldman Sachs in testimony before the House Finance Subcommittee chaired by Rep. Edward Markey, D-Mass.
 The Alliance, a group of money managers, broker dealers, and research providers, said the Goldman and Morgan proposal would, if enacted, do little more than serve the self-interest of the research and trading departments of Morgan Stanley and Goldman Sachs.
 The two investment banking firms are among the largest of Wall Street companies. Members of the Alliance - as well as related firms - are primarily smaller houses.
 In the view of the Alliance's members, "Goldman Sachs and Morgan Stanley were unsuccessful in the hearings in demonstrating that clients of money managers want this type of costly and unnecessary information, or that it would serve the interests of the investing public," said Lee Pickard, legal counsel to the Alliance.
 The investment banking giants proposed that Congress require a costly and elaborate item-by-item statement by money managers every 90 days, providing to their pension and other institutional accounts a detailed breakdown of commissions paid to various types of brokers. They are also requesting a listing of all "independent" research products and services acquired from a broker-dealer by the money manager, including the commission cost and hard cash value for each such service.
 "It is significant to point out that the `listing' requirements proposed by Goldman and Morgan would not apply to research produced by the two firms' in-house departments," said Mr. Pickard.
 "Congress will see this proposal for what it is; a self-serving attempt by the behemoths of Wall Street to squeeze revenue from specialized, successful competitors," said Howard J. Schwartz, president and chief executive officer of Lynch, Jones & Ryan, Inc.
 "The term `soft dollar arrangement or practice' is used to cover any situation in which research or brokerage services are provided by a broker-dealer in connection with the receipt of commissions," stated Mr. Pickard. He added, "It is essential to understand that under section 28(e), all research, including both "Street" research and independent third party research, needs the safe harbor."
 The Alliance works to foster a favorable regulatory environment in which independent research may be furnished to the money management community. The Alliance members believe that independent research provided under section 28(e) helps the investing public by encouraging competition between brokers, resulting in lower commissions and the availability of a greater number of research tools designed to assist money managers.
 -0- 7/15/93
 /CONTACT: Lee A. Pickard of Pickard and Djinis, 202-223-4418, or David Kogut of Nestor Group, 212-888-6115, both for Alliance In Support of Independent Research/


CO: Alliance In Support of Independent Research ST: District of Columbia IN: FIN SU:

LG-OS -- NY069 -- 2079 07/15/93 14:40 EDT
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Date:Jul 15, 1993
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