Once again an SEC chief is talking tough on limiting 12b-1 fees charged by mutual funds. The latest tough talk came from SEC Chairman Christopher Cox in a post-speech interview with reporters. The tough talk from Cox recalls similar statements made by then SEC-Chairman Harvey Pitt in May of 2002 in a post-speech press briefing with reporters.

Pitt was unable to pursue his review of fees as he was forced to resign under political pressure soon after he made his comments.

This time, the remarks are coming from an SEC chairman with more political pull, though it is far from clear that he will be able to undertake such an elemental reform of the industry. 12b-1 fees, first created in 1980, have grown to become a core component of fund distribution for funds using third-party platforms.

The WSJ Fund Track reports that Cox said "everthing is on the table." A statement that the paper interpreted as also covering a possible repeal of the fee that have been around since 1980.

Cox's speech [see full text] was also picked up on Friday by Dow Jones' Marketwatch unit. That coverage included Cox likening 12b-1 fees to a cable operator that charged subscribers $250 annually to market its programs.

During his talk with reporters, which came after his address to the Mutual Fund Directors Forum, Cox recalled the initial premise for allowing the fees in 1980. During his address, Cox said that he plans to ensure the SEC finalizes the independent directors and chairman rules this year.

"The original premise of 12b-1 seems highly suspect in today's world," Mr. Cox told fund directors. Cox also promised to purge "legalese" and "gobbledygook" from fund documents, so it may not be a good idea to hold one's breathe in wait for his reforms.  

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