SEC Proposes Killing 12b-1s, Letting B/Ds Set Their Own Fund Loads

In remarks on 12b-1 fees Wednesday at the SEC Open Meeting, SEC Commissioner Mary Schapiro said that the regulator is proposing rules that would "impose limits on the cumulative sales charge – or sales load – that an investor pays" and "eliminate the so-called 'hidden sales charges' that 12b-1 fees can represent by, for the first time, disclosing and regulating these fees as sales charges." The proposed rules would also allow broker-dealers to compete for clients by setting their own mutual fund sales loads rather using uniform loads set by funds.