MutualFundWire.com: What They are Saying about the SEC's Proposal

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Thursday, July 22, 2010

What They are Saying about the SEC's Proposal

Mutual fund industry professionals and observers are digesting the SEC's 278-page proposal on 12b-1 reform. Here's a look at some reactions that made it to mainstream publications:

As reported by The New York Times, Morningstar's vice president of research John Rekenthaler gave a thumbs up to the transparency and competition that would stem from the proposal. However, it could go a further in showing what fund companies are paying for, he added.

The Times also spoke with two attorneys, including Jay Baris, a lawyer with Kramer Levin Naftalis & Frankel who specializes in mutual fund matters. “This is a major proposal that will finally address the thorny issue of fund distribution," adding: “I think this will create more competition, and the hopes are that out of that investors can pick and choose the services that they want to pay for.”

Robert M. Kuruzca, a partner at Goodwin Procter and an SEC alum, said that the proposal, if adopted, could have "extraordinary ramifications in the marketplace for how mutual funds are sold and marketed," and that not all ramifications are necessarily good.

For his part, ICI president Paul Schott Stevens was quoted in The Washington Post as saying that the 12b-1 fees "have proven over time to be a highly efficient and tax-effective method for covering the costs of a range of services that are valuable and important for mutual fund investors." He added: "We look forward to reviewing and commenting on the SEC's proposed reforms to the 12b-1 rule, which will impact literally millions of investors, thousands of funds and myriad financial intermediaries."

Those comments were also carried by The Wall Street Journal.

Printed from: MFWire.com/story.asp?s=32891

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