Philadelphia partner Diana McCarthy was recently quoted in an Ignites article entitled “Sub-TA Sweep Gives Fund Shops a Bargaining Chip.” The article discussed the Securities and Exchange Commission’s longstanding investigation into fees paid by mutual funds to intermediaries. These investigations are focusing on whether fund assets are being improperly used to pay for intermediaries’ marketing and distribution activities rather than shareholder servicing.
Diana commented that funds face difficulties in tracking the types of services intermediaries provide to funds. “There are no rules that require [intermediaries] to distinguish services between distribution and non-distribution and what the fees are,” said Diana. “Sometimes it’s very difficult [for asset managers] to untangle the appropriate fees for the appropriate services.”