The Securities Industry Association is lauding the NASD for initiating a Mutual-Fund Task Force and said it looks forward to working with the panel.
Announce earlier this week, the task force is aimed at finding ways to make mutual fund costs and distribution arrangements more transparent.
“The securities industry is committed to improving the clarity of information given to investors,” said SIA’s chairman Richard Thornburgh, the chief risk officer for Credit Suisse Group and a member of the Credit Suisse Group Executive Board.
“We look forward to working with the NASD, as we have done in the past in resolving issues, for example, about breakpoints. The industry wants to do all we can to ensure that investors are fully informed before deciding which funds to own. This initiative is another positive step toward that goal.”
In a comment letter, the SIA also says that it supports the Securities and Exchange Commission’s proposal to bar funds from using directed brokerage to compensate brokers’ selling efforts. The SIA also called for the SEC to convene a roundtable or other forum to explore the overall mutual-fund compensation structure, the services that are funded through this structure, and the adequacy of the present disclosure regime.
In a separate comment letter, SIA also supports the SEC’s plan to require a 2% redemption fee on mutual-fund shares purchased and redeemed within five business days. The association expressed the belief that this should be a temporary solution that should ultimately be replaced by a fair-value pricing methodology.
SIA believes that this measure will complement those already in place to deter market timing and other short-term trading practices, and praised the fact that the proposal offers several methodologies for identifying transactions that are subject to the redemption fee. SIA does not support the additional requirement that intermediaries provide every fund on at least a weekly basis with complete transaction information including taxpayer identification numbers for every fund transaction executed.
SIA praises NASD task force
- By: IE Staff
- May 14, 2004 May 14, 2004
- 08:25