Mutual fund directors say that overseeing their service providers is the toughest job they have under newly introduced SEC regulations, according to a new survey.
   The survey by PricewaterhouseCoopers found that, after the new regulations were in effect for about a month, fund directors said the assessing, testing and evaluating of investment advisors, underwriters, transfer agents and other service providers had taken most of their attention.
   Of those surveyed, 64% said provider oversight is the most difficult part of the new regulations to monitor. Ranked second in difficulty was monitoring securities trading and brokerage practices, by 15%. Overseeing principal underwriter activities was cited by 9% of respondents as the most difficult job.
   The survey's authors noted that portfolio valuation and fund pricing were not mentioned by any of the 70 fund directors surveyed.
   Fund directors are focusing most often on investment advisors when it comes to oversight. Of the directors surveyed, 36% said advisors would be asked to make compliance control presentations over the next 12 to 18 months.
   "Operating in a market that is heavily dependent upon service providers and that has faced some 1,300 enforcement actions with $5 billion in fines, penalties and disgorgement in the past two years, mutual fund directors must ask the right questions," says Tony Evangelista, a PricewaterhouseCoopers partner and leader of the firm's regulatory compliance unit. "The SEC is holding fund directors ultimately accountable, so they must continuously monitor and test the controls they put in place."