The U.S. Securities and Exchange Commission announced that it has approved the proposed plan for Massachusetts Financial Services Co., a subsidiary of Sun Life Financial Inc., to pay US$50 million to investors for its part in the mutual fund sales practices scandal.

The commission issued an order that found MFS failed to adequately disclose to the boards of trustees and to shareholders of the MFS Funds the specifics of its “shelf-space” arrangements with brokerage firms and the conflicts created by those arrangements.

As part of the settlement, MFS agreed to a series of compliance reforms and to pay a penalty of US$50 million, which will be distributed to the MFS Funds. MFS agreed to settle the matter, without admitting or denying the commission’s findings.

Under the distribution plan, each MFS Fund shall receive a proportionate share of the disgorgement and penalty based upon the amount of brokerage commissions coded to pay for the “shelf space” arrangements attributed to each of the MFS funds.

In March 2004, the SEC and MFS settled am enforcement action over the company’s use of mutual fund assets – namely, brokerage commissions on mutual fund transactions – to pay for the marketing and distribution of mutual funds.