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24 August, 2018 - Niels Holch

In its proposed Regulation Best Interest, the SEC is to be commended for its overall goal of improving the standards of conduct for broker-dealers from the existing suitability standard.  However, the Commission's proposal--outlined in more than 1,000 pages of regulatory verbiage--is only going to confuse further the average individual investor, especially regarding their choices between a broker-dealer and a registered investment adviser.  And the proposed "best interest" standard of conduct for broker-dealers is not rigorous enough to protect individual investors who are...

13 March, 2018 - Niels Holch



Niels Holch is executive director of the Coalition of Mutual Fund Investors.


A January compliance call sponsored by the Securities and Exchange Commission’s Fort Worth, Texas, regional office warned participants that a 2017 review of fund and adviser examinations indicated too many firms were not properly following the commission’s compliance rule.  

 The compliance rule, which was promulgated by the SEC in 2003 for both investment companies and their advisers, requires fund boards to review and approve the compliance...

29 November, 2017 - Niels Holch

Niels Holch is executive director of the Coalition of Mutual Fund Investors.


Electronic communications are rapidly replacing paper documents and distribution arrangements that rely on the U.S. mail. The mutual fund industry is no different.


Fund shops are required to provide investors with periodic shareholder reports. The industry would like to move away from a paper-based system that is expensive to operate, to an electronic method that is not as cumbersome.


However, one...

20 July, 2017 - Niels Holch

By Niels Holch, Executive Director, Coalition of Mutual Fund Investors.


Recent regulatory and market developments are causing rapid changes to the traditional distribution model for mutual fund shares. Payments for distribution – including 12b-1, subaccounting and revenue-sharing fees – are being eliminated in favor of advisory and brokerage fees assessed directly to an investor’s account.


A January letter from the Securities and Exchange Commission also paved the way for a new kind of share class: clean shares. These products are stripped of all...

05 January, 2017 - Niels Holch

This column was published by Fund Board Views on January 5, 2017.


Four areas of focus when overseeing distribution fees, practices


By Niels Holch, Coalition of Mutual Fund Investors


The Securities and Exchange Commission has been focused for some time now on mutual fund distribution fees and practices. The SEC conducted a number of sweep examinations over the past several...

21 October, 2016 - Niels Holch

The SEC is conducting a review of Rule 22c-2 and CMFI submitted a comment letter on October 20, 2016.  This SEC review is a requirement under the Regulatory Flexibility Act that all rulemakings be evaluated after 10 years.


Rule 22c-2 provides authority for mutual funds to charge redemption fees in order to discourage market timing in fund shares.  Excessive short-term trading harms long-term shareholders by diluting the value of their shares.  SEC investigations into market timing determined that it was relatively easy for arbitageurs to hide out...

06 September, 2016 - Niels Holch

Mutual fund directors face many new challenges overseeing disclosures and monitoring whether they are accurate, meaningful, complete and timely.


Over the past several years, the Securities and Exchange Commission has increased the disclosure requirements for cyber security, fair valuation, money market funds, derivatives, sub-transfer agent fees, fixed-income risks and changing market conditions. The SEC has also initiated enforcement cases involving inaccurate or inadequate disclosures, with sanctions being imposed on both...

18 August, 2016 - Niels Holch

CMFI wrote to the SEC Investor Advisory Committee on August 18, 2016, expressing support for the Committee's recent recommendation that the SEC explore ways to improve mutual fund cost disclosures.


Here is a link to the Investor Advisory Committee's recommendation of April 14, 2016: 


In its letter, CMFI...

15 April, 2016 - Niels Holch

The SEC issued a Concept Release on December 31, 2015, with regulatory proposals to modernize its transfer agent rules:


On April 15, 2016, CMFI submitted a comment letter on this Concept Release.


A substantial majority of mutual fund shares now reside within intermediary-controlled omnibus accounts and the lack of transparency into investor identities and transactions has resulted in a significant...

21 March, 2014 - Niels Holch

On March 20, 2014, the Coalition of Mutual Fund Investors (CMFI) filed a comment letter with the Securities and Exchange Commission (SEC), in response to a new rule change affecting Section 529 college savings plans.


Click here to review this CMFI comment letter: