Rule 12b-1 Fund Assets to Finance Distribution of Shares
SIFMA provides comments to the Securities and Exchange Commission (SEC) regarding Rule 12b-1, which permits mutual funds to use fund assets to finance the distribution of their shares.
This comment letter follows up a June 19th roundtable event held by the SEC to re-evaluate the use of Rule12b-1.
SIFMA expresses the success of Rule 12b-1; curtailing or withdrawing the rule would harm investors and competition in the marketplace. Similarly, other fee arrangements have fostered innovation and supported higher levels of services. It may be appropriate to improve disclosures for the benefit of investors and fund boards, but it would be a major mistake for the SEC to withdraw or substantially curtail Rule 12b-1, or otherwise to restrict the fee arrangements that have fostered innovation, flexibility, and investor choice.