Several industry associations commented on the SEC mutual fund disclosure framework. As previously covered, the SEC requested comment on two features of its disclosure framework: (i) the processing fees charged by broker-dealers and intermediaries for delivering fund shareholder reports and other materials to investors and (ii) the fund disclosure process.
The Investment Company Institute ("ICI") and SIFMA, among others, submitted comments on the processing fees charged by intermediaries. The ICI urged the SEC to permit funds to negotiate prices with vendors and disregard the NYSE fee schedule. The ICI asserted that the NYSE schedule would cause the fees for funds to be higher than necessary.
SIFMA stated that:
- the current "one size fits all" distribution processing of fees is less costly and more practical than the proposed fulfillment service providers process;
- the preference management fee should continue to be charged for each distribution;
- the current fee structure for distributions to managed accounts does not warrant a price reduction; and
- there is no overlap between a fund's payments to brokers to reimburse them for distributing fund reports and other contractual arrangements.
Separately, the ICI provided feedback on how to enhance fund disclosures. Specifically, the ICI supported the modernization of the delivery of fund prospectuses and recommended that the SEC create a new, optional summary shareholder report for mutual and closed-end funds.
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