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Portfolio > Mutual Funds

A Whole New Meaning

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Kicker: Corrective Actions

MFS Makeover Regimen

Here are some of the actions MFS is taking to enhance trading practices and increase disclosure.

–Ban the use of brokerage commissions to acquire third-party research and market data services.

–Make permanent the ban on the use of brokerage commissions to recognize fund sales.

–Increase commission recapture programs to further cut operating expenses paid by shareholders.

–Expand the use of 2% redemption fees on exchanges and redemptions made within 30 days of purchase on certain funds.

–Expand the use of redemption fees to other MFS equity and bond funds, except money market funds, by imposing a redemption fee on all exchanges and redemptions made within 5 days of purchase.

–Continue to support the proposed 4 p.m. hard closing rule to eliminate any possibility of late trading.

–Expand oversight of shareholder trading practices to recognize potential excessive trading.

–Continue to use fair value pricing techniques to price portfolio securities more closely to their current value as of valuation time to help prevent trading abuses.

–Provide full expense disclosure of estimated expenses for each shareholder based on quarter-end holdings.

–Provide increased disclosure of portfolio turnover and brokerage costs.

–Expand sales disclosure by providing more prominent disclosure of breakpoints (volume sales discounts) and cash payments by MFS to brokers.


Reproduced from National Underwriter Edition, July 22, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.