Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:The SEC Starts a Four-Month, Share-Class-Disclosure Countdown Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, February 13, 2018

The SEC Starts a Four-Month, Share-Class-Disclosure Countdown

News summary by MFWire's editors

The SEC's Stephanie Avakian and Steven Peikin just made regulators' latest move against higher-fee mutual fund share classes, in the form of a carrot (or least a less painful stick) offered to the RIAs. Though the regulatory agency's new move will not directly push RIAs away from any particular share classes (say, A or C shares with baked-in 12b-1s), it will probably make it easier for RIAs to shift away from those share classes into institutional or clean shares.

Yesterday afternoon Avakian and Peikin, co-directors of the Securities and Exchange Commission's division of enforcement, unveiled the "Share Class Selection Disclosure Initiative" (SCSD). Under the SCSD, for RIAs who fess up to not disclosing potential conflicts associated with higher fee share classes and who self-report by June 12, the SEC will recommend a standardized settlement that only involves making investors whole (by the RIAs disgorging fees they received from the higher fee share classes) without adding on any kind of "civil monetary penalty." From the sound of things, after the SCSD window ends, RIAs who come under fire for these issues can expect stiffer penalties.

InvestmentNews and ThinkAdvisor both followed up on the news.

"We strongly encourage advisers to take advantage of the favorable terms we are offering," Peikin states. "These terms will not be available to advisers who do not self-report under this initiative, and we will continue to proactively seek to identify and pursue investment advisers that fail to make the necessary disclosures."

The main idea of the initiative, Avakian states, is "to facilitate the prompt return of money to victimized investors."

The SEC's move here follows a host of SEC and Finra enforcement actions going back to 2014, all around FAs' use of inappropriate share classes (and about the B-Ds, banks, or RIAs those FAs worked with) — in some of the Finra cases, like under this new SEC program, B-Ds who self-reported their share class issues only faced disgorgement while dodging fines.

Meanwhile, even as regulators push, the retail wealth management world seems to be shifting away from high fee share classes, too. At least one RIA custodian last year revealed that lower priced institutional shares now utterly dominate flows on its NTF (no transaction fee) platform. 

Edited by: Neil Anderson, Managing Editor


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q4Q3Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. MFDF webinar - BDC Board Service 101, December 10
  2. WE Boston - Give Back Event, December 10
  3. IMEA Distribution Council webinar - Unlocking Your Competitive Edge: Driving Results Through Net Promoter Excellence, December 10
  4. WE New York - End of Year Celebration, December 11
  5. MFDF webinar - ETF Product Trends: Board Implications, December 11
  6. Nicsa webinar - The Virtues of Corporate Culture, December 11
  7. MFDF webinar - Visually Mapping Board Composition: Skills Matrices in Fund Board Rooms, December 18
  8. IMEA webinar - Driving Equity: The FARE Journey and Its Impact on Financial Services, December 19
  9. MFDF webinar - 2024 Fair Valuation Pricing Survey: Building and Strengthening the Valuation Operating Model, January 7, 2025
  10. MFDF webinar - 15(c) White Paper Webinar Series: Part 2 – Board Processes, January 9, 2025
  11. MFDF webinar - AI and Fund Compliance, January 21, 2025
  12. MFDF In Focus - In Focus: Small Boards' Use of Skills Matrices, January 22, 2025
  13. MFDF 2025 Directors' Institute, January 27 - 29, 2025
  14. FSI OneVoice 2025, January 27 - 29, 2025
  15. 2025 ICI Innovate, February 3 - 5, 2025
  16. MFDF Director Discussion Series - Open Forum, February 10, 2025
  17. MFDF Director Discussion Series - Open Forum, February 11, 2025
  18. MFDF 2025 Fund Governance & Regulatory Insights Conference, March 6 - 7, 2025
  19. MFDF Director Discussion Series - Open Forum, April 2, 2025
  20. Envestnet Elevate 2025, April 9 - 10, 2025
  21. MFDF Director Discussion Series - Open Forum, April 15, 2025
  22. The 36th Sub-Advised Funds Forum, April 29 - 30, 2025
  23. Morningstar Investment Conference 2025, June 25 - 26, 2025
  24. MFDF Director Discussion Series - Open Forum, July 9, 2025




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use