The Securities and Exchange Commission will revisit 12b-1 fees in July, potentially putting a cap of 25 basis points on them and renaming them to clearly indicate their use for marketing purposes, said SEC Commissioner Elisse Walter.
However, the SEC will not turn its attention to 12b-1 fees until it has finished its work on the Dodd-Frank reform bill, she said. But once it takes up 12b-1 fees, she said, it will bring its “full force” to the issue.
The Commission unanimously voted 5:0 to reform 12b-1 fees last July. It must vote again on the proposal to make it final.
“The fees need to be set in a manner that’s fair,” Walter said. “It’s very difficult for investors to understand what they’re paying and when. [The name 12b-1] immediately sounds to an investor like something I don’t understand.”