FSI cheers preservation of 12(b)-1 rule

A decision by the Securities and Exchange Commission not to repeal or modify the 12(b)-1 rule, which allows some mutual funds charge to pass on promotion, distributions and marketing expenses to the customer, was applauded today by the Financial Services Institute Inc. of Atlanta.

A decision by the Securities and Exchange Commission not to repeal or modify the 12(b)-1 rule, which allows some mutual funds charge to pass on promotion, distributions and marketing expenses to the customer, was applauded today by the Financial Services Institute Inc. of Atlanta.
Reacting to an announcement by Andrew Donohue, director of the SEC’s Division of Investment Management, that the SEC will not pursue changes in the 12(b)-1 rule this year, the FSI said the rule “provides fair compensation to financial advisers for providing middle-class Americans with critical support and guidance in planning.”
He announced the change in the SEC’s 12(b)-1 plans at the Washington-based Investment Company Institute’s Mutual Funds and Investment Management Conference in Palm Desert, Calif., Monday. Preserving the $12 billion 12(b)-1 program has been a “top priority advocacy issue” for the FSI since 2007, the FSI said.