Paul Schott Stevens was fed up. And during a congressional hearing last month, the new president of the Investment Company Institute decided to let the world know it.

"The costs and burdens of regulation have the potential to reduce the level of competition, diversity and creativity that new and smaller firms historically have contributed to the fund industry," Stevens, 52, told members of the House Financial Services Committee's capital markets panel, which was meeting to review the spate of new Securities and Exchange Commission regulations passed in response to mutual fund scandals that surfaced in the fall of 2003.

Stevens griped that because the SEC rules do not apply to such investment products as hedge funds and brokerage wrap accounts, they put mutual funds at a competitive disadvantage. But now he appears to be reconsidering the merits of publicly slamming the fund industry's regulator.

"All of my comments were in the spirit of reflecting the need to have a constructive relationship between the industry and its regulator," he told Institutional Investor in an interview a few days after the hearing. He declined to reiterate his criticism of the SEC's recent actions. Instead, he allowed that as a result of the new rules, "there is significant economic pressure on smaller and medium-size firms."