The
Beginning with fund companies, the task force urges that they make investors and broker/dealers aware of such discounts and not bury the information in a fund prospectuss statement of additional information, or describe it in obtuse terms. Instead, fund companies should clearly explain breakpoint discounts in their prospectuses and on their web sites, the group suggested.
The task force also concluded that broker/dealers possess the necessary information to ascertain whether a customers current or historical purchases entitle them to such discounts. Should this mean counting related accounts, the task force said, broker/dealers and their transfer agents need to adjust their computer and accounting systems accordingly and share the information with fund companies. While such adjustments could be costly, the task force said, they are necessary because records are at the heart of the problem. "The process of linking or aggregating related accounts is challenging and is the crux of the problem faced by the mutual fund and securities industries," the task force said.
As a first step, the task force suggested that the fund industry create a central database of pricing methods, breakpoint schedules and linkage rules. As to consolidating the information across various brokers and fund families, the task force noted that the
Finally, noting that being charged the appropriate sales load is a vital right of investors, the task force called upon the NASD, the
