The SEC Talks Back

A couple of hot button topics received attention at a recent mutual fund conference. Mary Shapiro, Securities and Exchange Commission Chairman, discussed Rule 12b-1 and target-date funds.

I discussed both of the issues -- 12b-1 fees and target-date funds -- in earlier blog posts. The SEC has priorities (think of issues related to the Madoff scam), but Mary Shapiro and the SEC have apparently caught wind of the criticism (I know, they probably didn’t read it in my newsletter). At the conference she said that the timing of the review will need to be prioritized among other items on the SEC’s agenda. Ms. Sharpiro said that the reform may not occur in the next month, but she recognized the issues deserve SEC attention.

The Chairman’s remarks, at the very least, seem to be more political (in the best sense, if that’s possible), than the remarks made at an Investment Company Institute conference in March (which prompted my 12b-1 fee blog post). An SEC director stated that it would be “wise…in the current market environment, for us to defer consideration of the Rule 12b-1 reform for this year.”

Whether the SEC takes more action this year or not, it is safe to say that they recognize that many eyes and ears are on them.