February may seem far off, but its high time that mutual funds get up to speed on after-tax disclosure. While many firms have already taken steps to integrate after-tax performance calculations, especially those aiming to meet the
"If people want to be prepared to release their numbers in February, they have to deal with it now," said Kirk Botula, COO of
Paul Roye, director of the division of investment management at the SEC, gave fund executives a glimmer of hope that the rule might not come into effect at Mays meeting of the
"I think it was a brief shining moment of hope when he said that," said Botula.
In his
"If such legislation is adopted, we will certainly study any changes to the way fund distributions are taxed and consider the need to revisit our after-tax rules. If it turns out that the bulk of fund shareholders are able to defer paying taxes on their funds' distributions until they redeem their shares, then we will seriously consider whether there is a need for funds to provide after-tax returns," Roye said.
With the SECs deadlines drawing near, even the most hopeful firms will now have to face the reality of compliance with the rule. Botula said that its FundStation and FundStation.net users already have or soon will adopt the firms after-tax service. However, the firm is still receiving calls from non-clients.
While Confluence developed a stand-alone after-tax performance product for firms not currently using its service, Botula said that most firms are going whole hog.
"Everyones using it as an opportunity to replace and upgrade their performance systems so, for the most part, everyone is adopting the product suite," Botula said.
