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Sarbanes-Oxley News & Developments
SEC Opens Investigation Of Mutual-Fund SalesSEC regulators are probing into how brokers are paid for selling mutual funds.
> > The SEC has launched a fact-finding probe to determine if conflicts of interest exist in the way brokerage firms are compensated when selling mutual funds. The SEC also wants to determine whether brokers receive undisclosed compensation for selling certain mutual funds.
The mutual-fund industry has been under the microscope by regulators, who have expressed concern about everything from disclosure to fees that investors pay. Last year, the SEC voted to require mutual funds to disclose how they vote on proxy issues and are considering stricter oversight of the industry.
Mutual funds are required to disclose all costs that an investor is going to incur from owning the fund, including the amount paid to a broker. Funds need to be explicit in showing what a payment was for and if there was compensation for selling the fund.
The SEC probe follows the investigation into analyst conflicts of interest on Wall Street.
Source: The Wall Street Journal article
Published:2003-05-22
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