The SEC is focusing on complex and hidden fees that pose a risk to investors, chairman Jay Clayton revealed in a recent speech at a Practising Law Institute conference in New York. Clayton said the SEC is creating a database of financial advisers barred from the industry and would also seek to reduce undesirable practices through a two-pronged approach including both enforcement and clarified disclosure requirements. The SEC is targeting such practices as advisers putting investors into a relatively expensive mutual fund share class when a lower-cost class is available, advisers using fund assets to cover expenses that firms are expected to pay, and brokers increasing securities prices to increase their profits without adequate disclosure.
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