CMFI is a respected source on mutual fund issues and you can read about important public policy developments through media articles in which CMFI is quoted.  These media articles are archived back to 2003.

 

  • BoardIQ

    Recent regulatory and market developments are causing rapid changes to the traditional distribution model for mutual fund shares.  Independent fund directors must be prepared for these changes and should look for opportunities to reduce or eliminate distribution costs for the funds they oversee.

    July 18, 2017
  • BoardIQ

    While most fund complexes say that many components go into determining best execution of trades, one small family says it's all about the bottom line.  In a recent disclosure, Rareview Funds sets out its philosophy on best execution.

    June 6, 2017
  • Ignites

    UBS has tweaked the terms of what it charges fund complexes for networking fees and sub-transfer agency services, recent company disclosures show.  The wirehouse has expanded the range for what its fund partners will pay for omnibus accounting support.

    May 31, 2017
  • Ignites

    A shareholder in the $9.3 billion JP Morgan Large Cap Core Plus Fund has sued the manager for allegedly charging excessive advisory fees.  The plaintiff claims that JP Morgan Investment Management charged more to manage this Fund than it did to run other funds with almost identical strategies and holdings.

    May 10, 2017
  • BoardIQ

    Plaintiffs may lose excessive fee cases at trial, but they continue to survive early efforts to have the complaints thrown out.  At the same time, however, House Republicans unveiled draft legislation last week that includes tweaks to Section 36(b) that would make it harder for plaintiffs to prove their cases.

    April 25, 2017
  • Ignites

    A provision tucked into the revised Financial Choice Act would make it tougher for plaintiffs suing asset managers for alleged excessive mutual fund fees.  The measure would make the legal hurdles much higher for plaintiffs who bring lawsuits under Section 36(b) of the Investment Company Act.

    April 24, 2017
  • Ignites

    Calamos has winnowed the scope of a '40 Act excessive-fee lawsuit that it has been fighting for more than two years.  The plaintiffs last week agreed to voluntarily dismiss their claim that the $1.8 billion Growth Fund charged excessive 12b-1 fees.  However, Calamos continues to defend an excessive advisory fee claim.

    April 14, 2017
  • BoardIQ

    The Department of Labor last week delayed its fiduciary rule for 60 days and may postpone it further.  For fund directors, the delay is only the latest headache related to the rule.

    April 11, 2017
  • Ignites

    The Hartford's victory last month in an excessive-fee case represents the second post-trial triumph in the past year for an asset manager facing such claims--and both wins bode well for the more than a dozen firms fighting similar cases, industry attorneys say.  But at least one industry observer says it is too early to tell.

    March 16, 2017
  • Ignites

    The plaintifs in a '40 Act excessive-fee case against Prudential Investments have dropped their claims, according to a February 1 court filing that includes some unusual language.

    February 3, 2017
  • Ignites

    Botched integration of back-office systems following the 2009 merger of Morgan Stanley and Smith Barney has ended up costing the parent companies $14 million in regulatory fines.  The order followed one day after the NY attorney general's office announced a settlement with Citigroup regarding overcharges in wrap accounts.

    January 17, 2017
  • BoardIQ

    As long as they're specific about it, mutual funds may list sales loads associated with their distributors in a propectus appendix, the Securities and Exchange Commission said in a recent guidance.

    January 10, 2017
  • Fund Board Views

    Independent mutual fund directors need to get ahead of recent regulatory challenges and re-examine the processes they use to oversee the distribution of fund shares by large broker-dealers and other intermediaries.  This column is also available at...

    January 5, 2017
  • Ignites

    With the enforcement deadline for the Department of Labor's fiduciary rule due to take effect in April, several fund houses have registered new T class shares, most of which have one thing in common: a maximum sales charge of 2.50%.

    January 3, 2017
  • Reuters

    In courts across the land, investors are subjecting mutual fund boards to greater scrutiny.  Trustees, often paid hundreds of thousands of dollars a year, are under pressure to prove they have stood up for shareholders in an industry that has $16 trillion under management.

    December 27, 2016
  • iMoneyNet

    Money-market funds demonstrated remarkable resiliency this year to accommodate regulatory reforms that took full effect in October, industry experts told Money Fund Report, with expectations that economic growth and rising interest rates bode well for the money-market fund industry in 2017.

    December 27, 2016
  • FinOps Report

    Independent mutual find trustees will likely think twice before they say anything incriminating to their external legal counsel about how they administer mutual funds.  The rights of mutual fund investors to fair advisory fees trump the rights of independent mutual fund trustees to attorney-client confidentiality, says a federal judge.

    December 19, 2016
  • Ignites

    Harris Associates appears to have settled a lawsuit that claimed the firm overcharged investors in three of its mutual funds.  The terms of settlements in Investment Company Act excessive fee cases are confidential.

    December 14, 2016
  • BoardIQ

    A court order requiring Pimco independent directors to turn over confidential emails between them and board counsel is causing widespread concern about how it will impact the way fund board members communicate with their lawyers.

    December 13, 2016
  • Ignites

    On the same day the SEC announced a settlement with Calvert over the mispricing of bonds held in some of its mutual funds, the firm disclosed that it had also discovered that its funds has misused about $18 million of shareholder assets to pay for distribution-related services prior to 2015.

    November 4, 2016
  • BoardIQ

    Calvert Investment Management will pay a $3.9 million fine for failing to properly value illiquid bonds over a multiyear period, and although it already reimbursed shareholders $27 million, regulators are requiring the fund group to conduct a more rigorous calculation of investor losses.

    November 1, 2016
  • iMoneyNet

    Money-market funds were prepared to comply fully with reforms mandated in July 2014 by the Securities and Exchange Commission and last week's compliance deadline passed smoothly and seamlessly.

    October 20, 2016
  • Ignites

    J.P. Morgan Funds plans to peel the cost of recordkeeping and other administrative tasks paid to intermediaries from fund expenses next April, and will begin paying for those costs out of the distributor's pocket, regulatory filings show.

    October 11, 2016
  • BoardIQ

    A new payment arrangement at J.P. Morgan Funds for intermediary fees offers one way funds can comply with the Securities and Exchange Commission's updated guidance on such fees, some say.

    October 4, 2016
  • Ignites

    When it was first proposed as a measure to prevent market timing within mutual funds, the SEC's so-called redemption fee rule garnered significant backlash from industry participants.  Nearly a decade later, the SEC is revisiting Rule 22c-2 and it is unlikely the financial services industry will push for any changes.

    September 22, 2016
  • Ignites

    Northrop Grumman is facing a new 401(k)-fee lawsuit from plaintiffs represented by Jerome Schlichter, marking the second case the litigator has brought against the plan sponsor.  Schlichter alleges that the defense contractor improperly received compensation from the plan and overpaid for administrative and advisory services.

    September 20, 2016
  • BoardIQ

    Mutual fund directors face many new challenges overseeing disclosures and monitoring whether they are accurate, meaningful, complete, and timely.  Fund boards should develop robust oversight processes for due diligence purposes and to ensure that disclosure mistakes are minimized. 

    September 6, 2016
  • Ignites

    After a 25-day trial earlier this year, a federal judge ruled last week that the plaintiffs in a lawsuit against Axa Equitable failed to prove the firm charged excessive fees on about a dozen mutual funds offered within variable annuities and show actual damages.

    August 30, 2016
  • The Wall Street Journal

    Investors in money-market funds should prepare for extensive new rules in mid-October that promise to fundamentally change the $2.7 trillion industry, fund managers and experts say.

    August 9, 2016
  • BoardIQ

    A proposed SEC rule would for the first time require broker-dealers to publicly detail how they handle trade orders for mutual funds and other institutional investors, potentially giving independent directors a clearer idea of whether their products are receiving best execution.

    July 26, 2016
  • Ignites

    A recent lawsuit filed against Fujitsu America could herald trouble for the custon target-date fund market.  The lawsuit alleges that the company and its 401(k) fiduciaries built a plan with unreasonably high expenses and subpar investments.

    July 12, 2016
  • Ignites

    Metropolitan West has lost its attempt to throw out a lawsuit over the fees charged by its $77.9 billion Total Return Bond Fund.  A federal judge in California last week denied MetWest's December motion to dismiss the case, ruling that the plaintiff can proceed to the discovery phase of the case.

    June 21, 2016
  • BoardIQ

    Plaintiffs suing PIMCO over allegations it charged excessive fees on its flagship Total Return Fund may have a secret weapon previously unavailable to others pursuing similar lawsuits -- an aggrieved former director with intimate knowledge of the board and fund group's inner workings.

    June 13, 2016
  • iMoneyNet

    A bill that would rescind provisions in money-market fund reform rules that become effective in October will test the adage that presidential-election years hold little promise for the passage of contentious legislation.

    May 27, 2016
  • BoardIQ

    Directors often aim for their funds' fees to be in the middle of their peer group.  Data from Morningstar suggest they might want to aim lower.  The Morningstar report shows that, as Jack Bogle says, the expense ratio is the most reliable predictor of future fund returns.

    May 17, 2016
  • iMoneyNet

    The decision by a U.S. District Court judge in March to rescind the designation of MetLife as a systemically-important financial institution may slow the process of issuing additional determinations until an appeal filed by the Financial Stability Oversight Council is heard.  

    May 13, 2016
  • Ignites

    The plaintiffs in an excessive fee case against The Hartford have convinced the presiding judge that they deserve a trial, but just barely.  The judge denied summary judgment on the excessive fees issues, but ruled in favor of the management company on the Board's oversight process for approving advisory fee contracts. 

    April 19, 2016
  • BoardIQ

    Following the Securities and Exchange Commission's issuance of guidance on distribution fee oversight, independent directors have been discussing whether to add or adjust their disclosures about intermediary payments.

    April 19, 2016
  • CNBC Digital

    Goldman Sachs made a big debut in the exchange-traded fund market with its recent introduction of smart beta portfolios.  Goldman came in at such a low fee that it put the existing fund managers on notice.  But Goldman was offering annual fee waivers that would need to be renewed annually.

    April 11, 2016
  • Ignites

    Calamos has lost its bid to quash claims it charged excessive advisory and distribution fees to investors in its Growth Fund that two plaintiffs leveled against the firm in early 2015.  This appears to be one of the first cases involving allegations of excessive 12b-1 fees to survive a motion to dismiss.

    March 31, 2016
  • Ignites

    Retail investors are emerging as a potential ally to industry firms opposing the parts of the SEC's December derivatives rule proposal that threatens to kill certain leveraged and inverse ETFs, or at least dramatically alter their investment strategies.

    March 16, 2016
  • Ignites

    Great-West has been hit with two lawsuits involving mutual fund fees in less than a month.  In the most recent suit, three investors in several of the firm's funds claim that Great-West retains excessive fees for doing little of the work to manage funds that are subadvised by others.

    February 2, 2016
  • FinOps Report

    Nothing short of a revolutionary change in operational capabilities would be needed for swing pricing to be implemented in the U.S., As proposed by the SEC, swing pricing may also not be fair to individual investors.

    January 26, 2016
  • BoardIQ

    The recently settled enforcement case against First Eagle Investment Management should be considered a warning shot by the SEC and independent mutual fund directors should take proactive steps to evaluate more robustly the distribution arrangements of the funds they oversee.

    January 12, 2016
  • BoardIQ

    The SEC issued updated guidance on distribution fee oversight last week.  It places the responsibility for overseeing the reasonableness of fees paid out of fund assets squarely on independent directors and lists the factors they should consider when looking at payments to intermediaries outside of a 12b-1 plan.

    January 12, 2016
  • Investment News

    The Securities and Exchange Commission is warning mutual fund directors to look more closely at sub-accounting fees the funds pay brokers and other intermediaries who use them in investor portfolios.

    January 7, 2016
  • iMoneyNet - Money Fund Report

    Market observers generally agreed that the FOMC's well-telegraphed announcement last week successfully lifted the Federal Reserve's benchmark interest rate and that rising rates bode well for a yield-starved money-market fund industry.

    December 25, 2015
  • Ignites
    Prudential Investments charged excessive advisory fees on six sub-advised funds, keeping more than half of those fees for itself, a recent lawsuit alleges.
    December 2, 2015
  • BoardIQ

    When it came out in May that SEC examination officials referred Oppenheimer Funds to the enforcement division as part of their investigation into disguised distribution payments, the fund group insisted its funds do not pay third-party recordkeeping fees.  Disclosures in the funds' SEC filings, however, suggest otherwise.

    October 6, 2015
  • Investment News

    As she enters what could be her last year as chairwoman of the Securities and Exchange Commission, Mary Jo White has drawn both criticism and praise.  But one thing her detractors and supporters agree on is that she has one of the toughest jobs in Washington.

    October 4, 2015
  • Ignites

    Vanguard is lowering the hurdles for investors trading in and out of its mutual funds, relaxing a frequent trading policy that has stood out for its restrictiveness.

    September 17, 2015
  • BoardIQ

    The rise in omnibus accounting in recent years has led to a reduction in the services that transfer agents undertake for funds.  It has also made it harder for fund boards to exercise strong oversight, particularly when it comes to understanding and overseeing the related fees.

    September 8, 2015
  • The Wall Street Journal

    The U.S. fund industry was in turmoil Wednesday as executives scrambled to respond to a computer glitch that prevented dozens of mutual and exchange-traded funds from promptly pricing their securities.

    August 27, 2015
  • iMoneyNet [subscription required]

    The Securities and Exchange Commission's Division of Investment Management provided some helpful guidance to retail money-market fund providers and intermediaries in the frequently-asked questions it recently issued, by refining and clarifying the definition of "beneficial owner."

    August 26, 2015
  • Ignites
    A new Jersey federal judge has nixed Axa Equitable's last chance to avoid a trial or settlement of the excessive-fee lawsuit it has been fighting since 2011. This case is particularly interesting because the firm retained substantially more than 50% of the total advisory fee, while delegating the management of the portfolios to subadvisers.
    August 11, 2015
  • Investment News
    Two investors filed a lawsuit against State Farm Investment Management, alleging that the firm violated its fiduciary duty by charging excessive fees on its line of LifePath target date funds. State Farm is retaining almost half of the management fee for these funds, despite delegating the portfolio management functions to a subadviser.
    August 10, 2015
  • Investment News
    Three major broker-dealers must repay investors more than $30 million after improperly charging them for mutual funds that were purchased for retirement accounts and charities, FINRA announced Monday.
    July 6, 2015
  • Law360

    FINRA's decision not to levy fines against three broker-dealers that allegedly overcharged certain mutual fund customers shows there can be extraordinary rewards for extraordinary cooperation.

    July 6, 2015
  • Money Market Insight
    There were few surprises and some useful clarification in the money market fund reform guidance issued on April 22 by SEC staff. Nonetheless, responses to some questions addressed by the staff may not have provided the clarity industry participants hoped for, which may lead to the need for additional guidance.
    May 14, 2015
  • Ignites

    GE's disclosure that its decision to shed most of General Electric Capital Corp was driven largely by the fact that it had been tagged as a "systemically important financial institution" by the Financial Stability Oversight Council will embolden the super-regulator to designate more non-bank firms as such, according to an Ignites...

    April 20, 2015
  • Ignites
    BlackRock has failed to convince a federal court in New Jersey to scrap a lawsuit brought against the firm last year over excessive management fees. BlackRock provides the same or nearly the same investment services to unaffiliated funds it subadvises but at a much cheaper cost, according to the plaintiffs in this case.
    March 31, 2015
  • BoardIQ
    A recent disclosure by Deutsche Bank funds sheds light on what the adviser pays for revenue sharing, including the range of payments usually made to distributors. Industry experts say it's uncommon for fund documents to disclose those details, but it may become more common given SEC interest in what funds pay to distributors..
    March 24, 2015
  • Investment News

    An ongoing Securities and Exchange Commission sweep examination of payments from mutual fund companies to intermediaries such as broker-dealers has the fund industry on edge about whether the agency intends to upend the way funds get their shares into the hands of investors.

    March 20, 2015
  • Newsmax Finance

    The financial industry is feeling the effects of technological disruption, competition and regulation. This portends well for the investing public and a financial sector that has grown to unsustainable proportions.

    March 13, 2015
  • BoardIQ

    Fund directors should respond aggressively to increased regulatory scrutiny of intermediary fees because there's no end in sight to challenges of these arrangements.

    February 24, 2015
  • Ignites

    Two investors in the $3.3 billion Calamos Growth Fund have sued the firm, in what appears to be the first excessive-fee case filed against the Illinois-based fund manager. The plaintiffs allege that Calamos--acting as both distributor and advisor of the fund--did not negotiate at arm's length for the fees it charged retail investors.

    February 23, 2015
  • Investment News

    The Supreme Court has been asked to consider a case involving claims that BlackRock Inc. retains too much of what it makes for lending securities held by its exchange-traded funds.

    January 9, 2015