WASHINGTON - The
"It is very difficult to impose redemption fees on activity controlled by omnibus accounts," said Robert E. Plaze, an associate director in the SECs division of investment management. Omnibus accounts combine the assets of many accounts into one. However, the drawback from the regulatory standpoint is that it is difficult to discern which of the underlying investors are selling in or out of a fund since the transaction is coming from the combined omnibus account.
Plaze said the agency is looking for comments on the proposal, which would require more information on the individual activity be turned over to regulators, by May 10. Under the current reporting system, it would be nearly impossible for fund companies to comply with, or impose, the proposed minimum 2% redemption fee for short-term trading activity in mutual funds.
SEC Chairman William Donaldson also mentioned the new initiative on Friday. Donaldson said the new oversight task force will draft an outline for a new monitoring program, to look at new technologies to monitor activities in funds.
