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The weekly news source for investment management legal and compliance professionals

Topic: Fund Distribution

SEC’s Distribution-in-Guise Enforcement Drive Scores Multiple Wins

May 19, 2017
Advisers managing funds that pay for marketing and distribution services would be wise to make sure those payments fall within each fundís 12b-1 plan. The SECís distribution-in-guise crackdown, which resulted in several settlements in recent months, has already netted two in May Ė and the month isnít over yet.

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Misclassified Distribution Agreements May Lead to 12b-1 Consequences

May 12, 2017
Sometimes simple errors can lead to dire consequences. An advisory firm that inadvertently misclassifies distribution and marketing service agreements outside its Rule 12b-1 Plan and then causes its funds to pay for those services, for instance, may well find itself facing an SEC enforcement action.

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Share All Risks and Costs with Investors When Selling Securities

February 17, 2017
Sometimes even the big players need to learn a lesson about disclosure. Morgan Stanley Smith Barney and Citigroup Global Markets found this out the hard way when they each settled charges from the SEC that they made false and misleading statements about a foreign exchange trading program they sold to investors.

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Beware Finders Not Registered as Broker Dealers

February 26, 2016
Question: When does a third-party marketer need to be registered as a broker-dealer? Answer: Almost always.

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SEC Alleges Conflict of Interest In Adviser Favoring 12b-1 Funds Over Others

January 22, 2016
Thereís nothing wrong with putting clients into funds that charge fees for distribution Ė as long as you first let your clients know of any other funds you manage that do not charge such fees. Itís also probably best to if your firm didnít receive those distribution fees.

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Distribution Fees: New Mutual Fund Guidance Clarifies Board and Adviser Roles

January 8, 2016
Itís the job of a mutual fundís board of directors to police how shares are sold, and itís the job of the fundís adviser to provide the board with sufficient information to make that determination. That is the essence of the guidance update, "Mutual Fund Distribution and Sub-Accounting Fees," issued January 6 by the SECís Division of Investment Management.

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First Distribution-in-Guise Settlement Leaves Adviser $40 Million Poorer

September 25, 2015
The SEC has been saying that it would crack down on advisers it believed were using fund dollars to pay for distribution services. Now it has made good on that promise, with a mutual fund adviser and its affiliated distributor agreeing to pay nearly $40 million to settle the charges.

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Distribution Fees: Don’t Disguise Them as Something Else

May 8, 2015
The SEC doesnít like it when funds and advisers say they are paying for one kind of service when they actually are paying for another. Payments for sales of mutual fund shares are a case in point.

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OCIE Turns Its Attention to Never-Before-Examined Investment Companies

May 1, 2015
Mutual funds, open-end funds and other investment companies that have never been examined should start getting a bit nervous: Examiners may be coming.

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In-Kind Payments: Structure Them to Protect Your Firm

August 8, 2014
A cure, if not administered properly, can sometimes be worse than the illness.

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Three Strikes And You’re Out? FINRA Still Swinging For Revisions To The Mutual Fund Cash Compensation Rule

June 16, 2011
Itís premature, it creates inconsistencies, and it promotes investor confusion.

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Comments Are In On The SEC’s Rule 12b-1 Proposal

November 18, 2010


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Proposal To Revamp Mutual Fund Distribution Fees Released

July 27, 2010


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Money Funds Essential, Says Crane

March 6, 2009


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