- Fund Regulation
- Retirement Security
- Trading & Markets
- Fund Governance
- ICI Comment Letters
NASD Forms Mutual Fund Task Force to Enhance Cost, Distribution Transparency
Washington, DC, May 14, 2004 – The NASD recently announced the formation of a Mutual Fund Task Force whose mission will be to identify and recommend ways to bring greater transparency to mutual fund costs and distribution arrangements.
According to the NASD’s announcement, the task force members, who will represent a cross-section of the broker-dealer and mutual fund communities, will be appointed and begin their work by the end of June. The work of the task force is expected to proceed in two phases. The first phase will consider mutual fund portfolio transaction costs, including directed brokerage arrangements, soft dollars, and disclosure. It is expected to provide a report of its findings and recommendations to the SEC in the next several months in order to provide timely input into the SEC’s rulemaking process. The second phase will include a comprehensive view of mutual fund distribution and is expected to “require a longer time commitment” than the first phase.
The NASD’s announcement notes that the Mutual Fund Task Force is the product of discussions between the staffs of the NASD and the SEC and responds to proposals and requests for comment by the SEC on ways to improve disclosure of mutual fund costs and issues regarding mutual fund distribution arrangements.
The Investment Company Institute strongly supports efforts to provide investors with clear information about the costs of investing in mutual funds. Recently, the Institute supported a proposal to require broker-dealers to provide confirmation and point of sale disclosure documents to shareholders that include detailed information about distribution-related costs. The Institute also is represented on the NASD/Industry Task Force on Breakpoints, which aims to ensure that mutual fund investors are charged the correct sales charges on mutual fund transactions.
A section of this website is devoted to mutual fund fee disclosure issues.