OTHER NEWS - Aug. 16, 1996

Fidelity Reportedly to Create Insurance Affiliate: Fidelity Investments wants to create an affiliated insurance company that will guarantee its money market mutual funds against some but not all losses, according to a report in the New York Times. According to the newspaper, Fidelity has asked the Securities and Exchange Commission for permission to set up the insurance company with coverage up to $100 million but that it had yet to receive approval. The plan would give Fidelity an edge over its competitors by assuring money market fund shareholders that their investments would be at least partly insured against losses should an issuer of a security owned by the funds default, the paper said. The insurance would not, however, cover losses from market risks. Money market funds usually invest in short-term notes issued by the federal government or private companies. They are not insured, so it is possible for investors to lose some or all of an investment. But Fidelity said in its SEC application that it does not intend to use the insurance plan as a marketing tool, the newspaper said.