Amid the furor over the mutual fund trading scandal, three fund industry experts, Mercer Bullard, Jack Bogle and Don Phillips, told
The trio agreed that better disclosure would significantly help inform investors, who are often given vital information such as the selling broker's compensation, the fund's operating costs and potential conflicts of interests that might exist, after they have purchased a fund.
Bullard, head of shareholder advocacy group
Bogle and Bullard both said that transaction costs need to be disclosed more thoroughly. Even though the SEC is planning to require commission cost disclosure, Bullard said that spread costs should also be included in the disclosure statement given that commission costs only make up a small fraction of trading costs.
Bogle, the founder of
Phillips, managing director of Morningstar, however expressed satisfaction with the regulatory agenda the SEC has pursued in the last 18 months. But he called for further efforts to ensure that mutual funds are protected from being over-regulated and left vulnerable to frivolous litigation.
"I'd like to see funds get some relief from class-action lawsuits, to have fund regulation streamlined, and to have fund taxes linked to shareholder purchases and sales, not to the manager's activity," he said. He also said that he'd like to see greater transparency applied to mutual fund alternatives like separate accounts and hedge funds.