SEC Looking To Wrap Up Fund Reform

May 20, 2004 ( - The U.S. Securities and Exchange Commission (SEC) plans to have mutual fund reform completed by the early fall.

Speaking to a group of mutual fund executives at a conference held by the Investment Company Institute (ICI), SEC Investment Management Division Director Paul Roye said the recent spate of mutual fund trading scandals presented the industry with a defining moment. Thus, the industry need to rise up since the “status quo is no longer acceptable,” according to a Reuters report.

The SEC “has aggressive scheduling. You are going to see the commission next week taking action on several proposals… We are going to be done essentially by the end of the summer or early fall,” Roye told the audience at ICI’s conference.

Since September 2003, the agency has proposed 16 separate reforms for the mutual fund industry.   Among the reforms the SEC has proposed is an amendment to Rule 12b-1 prohibiting the practice of directed brokerage, and greater disclosure ofpolicies on granting “break-point” sales discounts to some fund investors.