Fundsters interested in the debate aroused by the SEC
's newly proposed 12b-1 fee reforms may want to take a look at a column last night in Bloomberg
. Susan Antilla lays out
her take on the history of 12b-1s and praises Mary Schapiro
's SEC for being "on the right track in trying to look after investors, albeit a few decades late."
"Let's see if the agency can stick with a decent plan once the industry lets loose with its inevitable campaign to water it all down," Antilla writes in conclusion. "Stand clear for a torrent of whining and general hysteria from brokerage firms and fund operators. For 30 years, they have luxuriated under regulations that allowed them to dip into fund assets to compensate salespeople who benefit most if they pick a fund with the greatest commissions, not the greatest promise for the customer."
Antilla cites: "The Rise of Mutual Funds," penned by ex-ICI
chief Matt Fink
; ex-SEC lawyer Ted Siedle
; and Wayne State University Law School professor Peter Henning. For mutual fund history buffs, Antilla lists E.F. Hutton
as the first fund firm to receive the SEC's approval to use 12b-1s to pay brokers (after the SEC created 12b-1s in 1980 to support advertising).
Neil Anderson, Managing Editor
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