The deadline for advisors to tell the Securities and Exchange Commission that they intend to participate in the agency’s Share Class Selection Disclosure Initiative hits on Tuesday.

The SEC explained in its early May frequently asked questions guidance that it does not plan to extend the deadline.

As of Monday afternoon, the agency had yet to issue a deadline extension.

The June 12 deadline, the SEC stated in the FAQ, “is merely the date by which a self-reporting advisor must notify the Division of its intent to participate in the SCSD Initiative,” in which the advisor must include, at a minimum, their name and contact information.

Advisors then have 10 business days from the date of notification to confirm eligibility for the SCSD Initiative by submitting a completed questionnaire.

The SEC may grant an advisor an extension of time to submit the questionnaire.

Jim Lundy, partner at Drinker Biddle & Reath, told ThinkAdvisor on Monday that about five of his advisor clients intend to self-report and participate in the initiative. He said the deadline to file is by Monday at midnight.

Under the SCSD Initiative, the Enforcement Division will recommend standardized, favorable settlement terms to investment advisors who self-report that they failed to disclose conflicts of interest associated with the receipt of 12b-1 fees by the advisor, its affiliates, or its supervised persons for investing advisory clients in a share class paying 12b-1 fees when a lower-cost share class of the same mutual fund was available for the advisory clients.

In such cases the Enforcement Division will recommend settlements that do not impose a civil monetary penalty while requiring participating advisors to return ill-gotten gains to harmed clients.

If an advisor fails to self-report and the SEC discovers a violation, the agency has stated that civil money penalties and other enforcement actions may be taken.

“This area will remain a priority for enforcement and exam staff” when examining registered investment advisors over “the next year or two,” Lundy said.

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