A Jan. 3 article published by InvestmentNews reports on the Dec. 15, 2016 guidance issued by the SEC’s Division of Investment Management regarding the way in which funds should disclose fee changes to comply with the Department of Labor’s fiduciary rule. Mutual funds that modify their fees and offer new share classes to comply with the fiduciary rule must clearly highlight the changes and can outline them in a prospectus appendix. The guidance also addressed how funds should disclose changes to sales loads that level compensation for brokers. “They want the variations in the prospectus and they want the broker identified,” stated investment management partner Michael Doherty (New York) in the piece. “It's helpful in the sense that fund groups have been hearing rumors of what the SEC staff is looking for, and this [guidance] gives them more certainty.” The DOL’s fiduciary rule is presently due to become effective on April 10.
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