The Financial Services Institute (FSI), the association of independent broker-dealers, e-mailed a 10-page letter to the SEC on Friday, warning of the “important unintended consequences” for IBDs, their reps and those reps’ clients should the SEC’s proposed changes to Rule12b-1 be adopted by the Commission.
Signed by the president and CEO of FSI, Dale Brown, the letter warns that adoption of Rule 12b-2 would have the effect of “limiting investor access to service and support” and instead would create a “duplicative, ineffective, post-transaction disclosure regime.”
FSI said it polled its individual advisor members to get their feedback on what 12b-2 would mean for them and their clients. The polled advisors, the letter said, would support “adoption of proposed descriptive names for mutual fund distribution fees and enhanced prospectus disclosure improvements” as called for in the proposal.