The Investment Company Institute Monday said it strongly supports the SEC’s pending proposal to ban directed brokerage arrangements and amend Rule 12b-1 to prohibit fund companies from using these fees to pay commissions to brokers who sell their funds.

"Prohibiting the allocation of brokerage based upon sales considerations is warranted because the practice of directed brokerage can give rise to the appearance of conflicts of interest," Amy Lancellotta, acting ICI general counsel, said in a letter to the SEC.

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