FOR IMMEDIATE RELEASE                                       99-91

    Commission Proposes Rule To Ban Pay-to-Play by Investment
                            Advisers

     Washington, DC, August 4, 1999 -- The Securities and
Exchange Commission today proposed a rule that would prohibit
investment advisers from making political contributions to obtain
government contracts to manage public funds, a practice known as
pay-to-play.  The proposal will be issued for a 75-day public
comment period prior to being considered for final adoption by
the Commission.

     SEC Chairman Arthur Levitt said, "This measure is a natural
extension of our long-standing efforts to stamp out pay-to-play
in the municipal finance world.  Restricting pay-to-play among
investment advisers to public pension plans is critical to
ensuring the confidence of millions of public employees who rely
on their pensions and expect them to be managed by the most
qualified investment advisers -- not the most connected."

     The proposed rule is the result of an extensive SEC staff
examination into alleged pay-to-play practices.  The staff found
that pay-to-play practices play a similar role in the investment
adviser selection process as they played in the selection of
municipal bond underwriters before the implementation of the
Municipal Securities Rulemaking Board's Rule G-37.  Rule G-37, in
effect since 1994, prohibits municipal bond dealers and brokers
from engaging in pay-to-play and is widely credited with helping
to clean up the municipal bond industry.

     Modeled substantially on Rule G-37, the proposed rule would
generally prohibit investment advisers from providing public
pension plan advisory services for two years after the adviser,
or any of its partners, executive officers or solicitors,
contributes to the campaigns of certain elected officials or
candidates.  The rule would except certain contributions of $250 
or less.  The rule would also require registered advisers with
government clients to keep records of their political
contributions.  The rule applies to investment advisers
registered with the Commission.  (The SEC regulates advisers with
more than $25 million of assets under management.)

     For further information concerning the proposed rule,
contact Robert Plaze in the SEC's Division of Investment
Management at (202) 942-0716.

                             #  #  #