BISYS Group, which provides back-office and marketing support to mutual fund clients, has just indicated in an SEC filing that the Commission is looking at how it allocates marketing and distribution payments on behalf of some of its clients.

BISYS said the inquiry is most likely part of what has become a standard, industrywide request by the SEC for information on marketing and distribution arrangements. BISYS also issued a statement saying it is cooperating fully with the SEC.

The SEC has been investigating directed-brokerage agreements between fund companies and brokers who give preferential treatment to funds in exchange for receiving trade orders. The Commission has also come down hard on companies that pay brokers for shelf space without disclosing this to investors.

Brokers’ soft-dollar incentives to fund companies that extend beyond the normal boundaries of research have raised red flags at the SEC, as well, which is said to be discussing clear-cut definitions of what should be permissible.

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