Tar Heel Officials Extend "Merrill Lynch Principles" Compliance Deadline

November 15, 2002 (PLANSPONSOR.com) - Investment companies interested in doing business with the state of North Carolina now have another 10 weeks to comply with tough new ethics rules.

According to a Dow Jones news report, North Carolina Treasurer Richard Moore extended the deadline to comply with the “Merrill Lynch Principles” from October 31 to January 15, 2003.

“We changed the deadline because there are attempts by the industry and the Securities and Exchange Commission (SEC) and other regulatory bodies to have a global settlement that in all likelihood will set an even higher accountability standard,” Moore told Dow Jones.

Under the Merrill Lynch Principles, financial firms that do business with North Carolina would adopt the conflict-of-interest principles outlined in an agreement New York State Attorney General Eliot Spitzer reached with investment firm Merrill Lynch & Co. on May 21. (See the ” Merrill Lynch Principles “).

The principles call for financial organizations that provide investment-banking services to the state to separate compensation for analysts and investment banks, and prohibit investment banks from having input into analyst compensation. They also call for companies to create review committees to approve all research recommendations and other measures.

California and New York also want financial advisers who do business with their pension funds to adopt the principles. The Board of the Pennsylvania State Employees’ Retirement System (SERS) announced November 4 that it, too, would embrace the principles. (See Pa. Pension Embraces ‘Merrill Lynch Principles’).