The Securities and Exchange Commission Tuesday issued a report indicating that increased transparency in the $6.4 trillion mutual fund industry is necessary, but hinted that large scale changes are not likely due to their impracticality.

The report was issued in response to a letter sent to the SEC by Capital Markets Subcommittee Chairman Richard H. Baker (R-LA) back in March requesting information on a number of topics relating to mutual funds. In the 120-page report, the Commission responded to Baker’s questions on expense ratios, competition among mutual funds, the opacity of portfolio trading costs, soft dollar commissions and conflicts of interests. It also addressed the adequacy of the disclosure in shareholder reports, revenue-sharing payments facilitating the distribution of fund shares and other issues.

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