Capital Markets Subcommittee Chairman Richard H. Baker (R-LA) introduced a bill Wednesday that would require funds to disclose operating expenses and portfolio transaction costs and have directors crack down on soft-dollar and revenue-sharing arrangements. The bill takes into account the recommendations that the Securities and Exchange Commission issued Tuesday calling for more transparency in the fund industry (see MME 6/11/03).
If passed, the Mutual Funds Integrity and Fee Transparency Act of 2003 would require funds to disclose operating expenses in dollar amounts and reveal portfolio transaction costs in a way that will allow investors to compare them among various funds. Funds would also have to inform investors of breakpoint discounts they might be eligible for. The act would also require investment advisors to provide a report to directors every year on revenue-sharing, directed brokerage and soft-dollar arrangements.