In an update from the Financial Planning Association, 12b-1 Fees are back in focus for the SEC. In testimony before a subcommittee of the Senate Appropriations Committee, SEC Chairman Mary Schapiro disclosed that she has directed staff to prepare a recommendation on whether to make changes to Rule 12b-1, which allows mutual funds to use fund assets to pay expenses including promotions, distributions, and broker commissions. Noting $13 billion in 12b-1 fees were generated in 2008, Schapiro said that it was time for a “comprehensive re-examination†of the rule and fees. “If issues relating to these fees undermine investor interests, then we at the SEC have an obligation to step in and adjust our regulations,†Schapiro added. In a 2007 survey, FPA members indicated that 12b-1 fees are an appropriate form of compensation that should be preserved, but recognized that improved disclosure requirements could be beneficial. (Source: Financial Planning Association June 2009)
