HIDDEN OMNIBUS ACCOUNTS



A majority of investors purchase mutual fund shares through brokers, financial advisors and other intermediaries. Many of these financial intermediaries do not place individualized trading orders for each of their customers, preferring to aggregate all customer transactions into one consolidated purchase or redemption request on each day the markets are open. This aggregated order is called an omnibus account.

 

While the omnibus accounting process may be efficient for transacting in fund shares, the identities of individual investors and necessary information about their transactions are typically hidden from mutual fund compliance personnel. This lack of transparency at the individual account level makes it difficult, if not impossible, for mutual funds to uniformly apply the policies and procedures contained in their prospectuses filed with the SEC.

 

Since the market timing and late trading scandals of 2003-2004, the regulatory problems caused by omnibus accounts have only become more significant. For example, mutual funds are not able to: (1) monitor on a consistent basis the arbitrage activities of short-term traders; (2) provide the appropriate volume or "breakpoint" discounts for sales loads offered to investors making larger purchases of fund shares; (3) evaluate the liquidity needs of investors in money market funds; and (4) ensure accurate and timely restitution and other distributions for investors aggrieved by the iimproper market timing or late trading activities by a particular fund.

 

For many years, CMFI has advocated that the SEC adopt additional regulatory measures to ensure that mutual fund prospectus policies and procedures are enforced uniformly for all mutual fund investors. This can be accomplished by providing funds with full transparency of investor-level information through each omnibus account, on a same-day or real-time basis.

 

Omnibus accounting is also being used by large broker-dealers to extract additional payments and fees from funds and their investors. In August 2010, CMFI released a White Paper that analyzes the fees being charged to support omnibus accounts. CMFI's analysis uncovered annual costs being imposed on individual investors of as much as $2.2 billion in account maintenance charges, more than $4.18 billion in shareholder servicing payments, and more than $2.09 billion in revenue-sharing payments. Many of these payments are completely unnecessary under existing regulatory rules and industry best practices.     

 

Proper oversight of omnibus accounts is an important issue for individual mutual fund investors. Click on the tabs for Documents, Comments, and Blog Entries to review the latest developments on these hidden accounts.

 

  • CMFI Comments on SEC Review of Rule 22c-2
    On October 20, 2016, CMFI submitted a comment letter to the SEC, as a part of the agency's review of Rule 22c-2, which permits mutual funds to receive information from broker-dealers and other financial intermediaries about the identities and transactions of fund shareholders transacting through omnibus accounts. CMFI recommended that Rule 22c-2 be amended to require that this information be shared with mutual funds on a daily basis, instead of upon request.
  • CMFI Comment Letter to the Financial Stability Board
    On September 20, 2016, CMFI submitted a comment letter on omnibus accounts to the Financial Stability Board (FSB), based in Basel, Switzerland. The FSB recently released a consultation document asking for comment on whether international regulators should be providing additional tools for mutual funds to better manage their liquidity risks, especially in times of severe market stress. CMFI believes that many effective tools--such as redemption fees and gates--only will work if regulators also permit funds to have transparency within omnibus accounts.
  • CMFI Comment Letter on Proposed SEC Transfer Agent Rules
    On April 15, 2016, CMFI filed a comment letter with the SEC on its proposed transfer agent rules. CMFI advocated that the SEC require broker-dealers to provide mutual funds with omnibus account transparency to ensure the proper application of regulatory rules and compliance with prospectus policies and procedures.
  • CMFI Files Comment Letter on Proposed SEC Liquidity Risk Management Programs
    On January 18, 2016, CMFI submitted a comment letter to the SEC regarding its proposals to improve liquidity risk management programs utilized by mutual funds. In its letter, CMFI stated its belief that the widespread use of omnibus accounts by broker-dealers and other financial intermediaries is an obstacle to proper and fair implementation of several of the SEC's regulatory proposals.
  • CMFI Files Comment Letter on Labor Department Fiduciary Rules
    On July 21, 2015, CMFI filed a comment letter with the U.S. Department of Labor on its regulatory proposals to amend the definition of fiduciary and to authorize exemptions to the ERISA prohibited transaction rules.
  • CMFI Summary of Fund Industry Policies Regarding Omnibus Accounts
    On June 10, 2015, CMFI updated its summary of the most recent prospectus filings of the 50 largest mutual fund groups, regarding their policies and procedures in overseeing omnibus accounts. This summary contains excerpts from the prospectus disclosures made by these fund groups. The public disclosures confirm that individual investors are not adequately protected within omnibus accounts controlled by broker-dealers and other third-party financial intermediaries.
  • CMFI Comment Letter to Financial Stability Oversight Council
    On March 23, 2015, CMFI submitted a comment letter to the Financial Stability Oversight Council, in response to its request for information on whether certain asset management products and activities may pose potential risks to the U.S. financial system.
  • CMFI Letter to the White House Council of Economic Advisers
    On February 17, 2015, CMFI sent a letter to Jason Furman, Chairman of the President's Council of Economic Advisers. The CMFI letter responds to a White House memorandum that describes conflicted sales load charges and revenue-sharing payments being made to broker-dealers in connection with the distribution of mutual fund shares.
  • CMFI Sends Letter to Financial Stability Oversight Council
    On November 14, 2014, CMFI sent a letter to the staff of the Financial Stability Oversight Council regarding its review of the potential risks of products and activities within the asset management industry. CMFI advocates that this review should include the business practices of those large broker-dealers that are marketing mutual fund shares and engaging in a blatant "pay to play" business model.
  • CMFI Letter to FinCEN on Transparency in Anti-Money Laundering Programs
    On October 8, 2014, CMFI sent a comment letter to the Financial Crimes Enforcement Network (FinCEN), regarding its proposed regulations to combat money laundering. CMFI's comment letter discusses the need for investor-level transparency within omnibus accounts, to ensure that FinCEN's regulatory objectives are met. The attachment to this comment letter, a paper describing the history of the NSCC Networking service, is available below.
  • History of NSCC Networking
    On October 3, 2014, CMFI updated its white paper describing the history of the National Securities Clearing Corporation's (NSCC) Networking Service, which is the most cost-effective processing platform available to provide investor-level transparency within broker-dealer-controlled omnibus accounts.
  • SEC Response to CMFI Letter
    On August 20, 2014, the SEC responded to CMFI's June letter regarding broker-dealer fees and omnibus accounts.
  • CMFI Letter to SEC Director Andrew Bowden
    On June 17, 2014, CMFI sent a letter to Andrew Bowden, Director of the SEC Office of Compliance Inspections and Examinations. This SEC Office is conducting a formal review of mutual fund distribution payments. CMFI urges in this letter that the SEC expand its review to include the business practices of large broker-dealers that are marketing mutual fund shares.
  • CMFI Letter to Independent Trustees of Top 50 Fund Groups
    On October 11, 2013, CMFI sent a letter to the Audit Committee Chairperson for each of the 50 largest mutual fund groups, urging independent trustees to investigate and address the problems that result from the use of omnibus accounts by large broker-dealers and other financial intermediaries.
  • CMFI Summary of the Omnibus Accounting Policies of the 50 Largest Mutual Fund Groups
    On April 14, 2013, CMFI updated its summary of the most recent prospectus filings of the 50 largest mutual fund groups, regarding their omnibus accounting policies. This summary contains excerpts from the prospectus disclosures made by these fund groups. These public disclosures confirm that individual investors are not adequately protected within omnibus accounts controlled by third-party financial intermediaries.
  • History of NSCC Networking
    On January 2, 2013, CMFI updated its document describing the history of the National Securities Clearing Corporation's Networking service, which dates back to 1989. This automated utility facilitates the exchange of customer account information between mutual funds and their financial intermediaries. Despite the significant operational efficiencies derived in using this service, large broker-dealers are trying to move investor accounts away from this system to a more segregated and non-transparent system of omnibus accounts. The use of omnibus accounts generates additional fee income for brokerage firms and results in harm to investors by increasing costs and making it impossible for mutual funds to ensure prospectus and regulatory compliance within these accounts.
  • NICSA Response Letter to CMFI
    On December 5, 2012, NICSA President Theresa Hamacher sent a letter to CMFI, in response to CMFI's comment letter on the NICSA white paper on omnibus account oversight, which was published in September 2012.
  • CMFI Letter Regarding NICSA White Paper
    On November 15, 2012, CMFI sent a letter to the National Investment Company Service Association (NICSA), commenting on a recent NICSA white paper on omnibus accounts. The CMFI comment letter advocated for a regulatory and operational framework that provides for full transparency within omnibus accounts, down to the individual investor level.
  • NICSA Publishes White Paper on Mutual Fund Oversight of Omnibus Accounts
    In September 2012, the National Investment Company Service Association (NICSA) published a white paper entitled, "Effective Intermediary Governance: Evolving Best Practices." This white paper discusses emerging best practices for mutual fund oversight of omnibus accounts maintained by broker-dealers and third-party recordkeepers.
  • CMFI Letter to SEC Asset Management Unit
    On August 6, 2012, CMFI sent a letter on omnibus accounting to the staff of the SEC's Asset Management Unit, within the agency's Enforcement Division.
  • CMFI Summary of the Omnibus Accounting Policies of the 50 Largest Mutual Fund Groups
    On May 24, 2012, CMFI updated its summary of the most recent prospectus filings of the 50 largest mutual fund groups, regarding their omnibus accounting policies. This summary contains excerpts from the prospectus disclosures made by these fund groups. These public disclosures confirm that individual investors are not adequately protected within omnibus accounts controlled by third-party financial intermediaries.
  • CMFI Letter to Deloitte on Omnibus Accounts Study
    On April 27, 2012, CMFI sent a comment letter to Deloitte about its recently released white paper on omnibus accounts. The letter discusses the CMFI reports and studies that analyze the cost and transparency issues caused by this broker-dealer accounting practice.
  • Deloitte Paper on the Risks of Omnibus Accounting
    On March 16, 2012, Deloitte released "The Omnibus Revolution: Managing risk across an increasingly complex service model." This paper discusses the growth of omnibus accounting within the mutual fund industry and the the regulatory and reputational risks that this type of distribution model creates for funds and their investors. The Deloitte paper contains an excellent description of the oversight and other issues involved in omnibus accounting by fund intermediaries.
  • SEC Response to CMFI Letter on Omnibus Accounting
    On January 17, 2012, the SEC sent a response to CMFI's recent letter to the SEC's Enforcement Division about the high costs of omnibus accounting. The SEC's letter states that the issues raised in the CMFI letter will be considered by the Enforcement Division staff, from the viewpoint of the agency's responsibilities under the federal securities laws. This SEC letter was sent by the Office of Market Intelligence within the Division of Enforcement.
  • CMFI Letter to SEC Enforcement Division on Omnibus Accounting
    On December 20, 2011, CMFI sent a letter to SEC Enforcement Division Director Robert Khuzami, regarding the fee structures being used to support omnibus accounting by large broker-dealers. CMFI encouraged the SEC to evaluate the fees being charged for subaccounting services being provided by these broker-dealers, as a part of the Enforcement Division's Mutual Fund Fee Initiative.
  • CMFI Summary of the Omnibus Accounting Policies of the Largest Fund Groups
    On June 10, 2011, CMFI updated its summary of the most recent prospectus filings of the largest mutual fund groups, regarding their omnibus accounting policies. These public statements confirm that investors are not adequately protected within third-party omnibus accounts.
  • SEC Letter in Response to CMFI White Paper on Mutual Fund Account Fees
    In September 2010, the SEC responded to the CMFI White Paper on mutual fund account fees.
  • CMFI Letter to SEC Chairman Mary Schapiro on the Shareholder Costs of Hidden Mutual Fund Accounts
    On August 18, 2010, CMFI sent a letter to the SEC, transmitting a copy of its latest White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by large broker-dealers and other intermediaries. This CMFI White Paper concluded that as much as $8.47 billion is being charged to fund shareholders each year to pay for shareholder servicing and record keeping activities in these hidden accounts.
  • CMFI White Paper on the Shareholder Costs of Hidden Mutual Fund Accounts
    On August 18, 2010, CMFI issued a White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by large broker-dealers and other intermediaries. This CMFI White Paper concluded that as much as $8.47 billion is being charged to fund shareholders each year to pay for shareholder servicing and record-keeping activities in these hidden accounts.
  • CMFI Letter to SEC Chairman Mary Schapiro on the Shareholder Costs of Hidden Mutual Fund Accounts
    On October 12, 2009, CMFI sent a letter to the SEC, transmitting a White Paper on the costs to shareholders of hidden mutual fund accounts managed by third-party financial intermediaries.
  • CMFI White Paper on the Shareholder Costs of Hidden Mutual Fund Accounts
    On October 12, 2009, CMFI issued a White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by third-party financial intermediaries. This CMFI White Paper concluded that as much as $9.6 billion is being taken from fund shareholders each year to pay for shareholder servicing and recordkeeping activities in these accounts.
  • SEC Letter in Response to CMFI White Paper on Risks in Hidden Shareholder Accounts
    On June 23, 2009, SEC Chairman Mary Schapiro sent a letter in response to the CMFI White Paper on the risks inherent in hidden mutual fund accounts.
  • CMFI Letter to SEC Chairman Mary Schapiro on Market Timing and Other Risks in Hidden Shareholder Accounts
    On May 6, 2009, CMFI sent a letter to the SEC enclosing a White Paper on the risks to long-term shareholders of hidden mutual fund accounts.
  • CMFI White Paper on Market Timing and Other Risks in Hidden Shareholder Accounts
    On March 30, 2009, CMFI issued a White Paper on the risks to long-term shareholders of hidden mutual fund accounts.
  • SEC Letter to CMFI on Omnibus Accounts
    On January 16, 2009, the SEC sent a letter in response to CMFI’s letter to SEC Chairman Christopher Cox on the regulatory problems with omnibus accounts.
  • CMFI Letter to SEC Chairman Christopher Cox on Omnibus Accounts
    On December 15, 2008, CMFI sent a letter to the SEC advocating that the Commission address: (a) regulatory gaps in the use of omnibus accounts, and (b) the lack of disclosure regarding third-party distribution payments.
  • SEC Letter in Response to CMFI Letter on Technology and Omnibus Accounts
    On November 9, 2005, the SEC sent a letter in response to CMFI’s letter to SEC Chairman Christopher Cox, regarding the use of technology to address problems caused by omnibus accounts.
  • CMFI Letter to SEC Chairman Christopher Cox on the Use of Technology to Protect Individual Investors
    On October 20, 2005, CMFI sent a letter to SEC Chairman Christopher Cox regarding the use of technology to resolve the problems caused by omnibus accounting and to protect the interests of individual investors.
  • SEC Response to CMFI Letter on Omnibus Accounts
    On December 22, 2003, the SEC responded to CMFI’s letter advocating more transparency within broker-dealer omnibus accounts.
  • CMFI Letter to SEC Chairman William Donaldson Regarding Omnibus Accounts
    On December 12, 2003, CMFI sent a letter to SEC Chairman William Donaldson regarding the need to provide full transparency within third-party omnibus accounts, in order to ensure that mutual fund shareholder receive uniform application of a fund’s policies and procedures.

A majority of investors purchase mutual fund shares through brokers, financial advisors and other intermediaries. Many of these financial intermediaries do not place individualized trading orders for each of their customers, preferring to aggregate all customer transactions into one consolidated purchase or redemption request on each day the markets are open. This aggregated order is called an omnibus account.

 

While the omnibus accounting process may be efficient for transacting in fund shares, the identities of individual investors and necessary information about their transactions are typically hidden from mutual fund compliance personnel. This lack of transparency at the individual account level makes it difficult, if not impossible, for mutual funds to uniformly apply the policies and procedures contained in their prospectuses filed with the SEC.

 

Since the market timing and late trading scandals of 2003-2004, the regulatory problems caused by omnibus accounts have only become more significant. For example, mutual funds are not able to: (1) monitor on a consistent basis the arbitrage activities of short-term traders; (2) provide the appropriate volume or "breakpoint" discounts for sales loads offered to investors making larger purchases of fund shares; (3) evaluate the liquidity needs of investors in money market funds; and (4) ensure accurate and timely restitution and other distributions for investors aggrieved by the iimproper market timing or late trading activities by a particular fund.

 

For many years, CMFI has advocated that the SEC adopt additional regulatory measures to ensure that mutual fund prospectus policies and procedures are enforced uniformly for all mutual fund investors. This can be accomplished by providing funds with full transparency of investor-level information through each omnibus account, on a same-day or real-time basis.

 

Omnibus accounting is also being used by large broker-dealers to extract additional payments and fees from funds and their investors. In August 2010, CMFI released a White Paper that analyzes the fees being charged to support omnibus accounts. CMFI's analysis uncovered annual costs being imposed on individual investors of as much as $2.2 billion in account maintenance charges, more than $4.18 billion in shareholder servicing payments, and more than $2.09 billion in revenue-sharing payments. Many of these payments are completely unnecessary under existing regulatory rules and industry best practices.     

 

Proper oversight of omnibus accounts is an important issue for individual mutual fund investors. Click on the tabs for Documents, Comments, and Blog Entries to review the latest developments on these hidden accounts.

 

Document Title: 
CMFI Comments on SEC Review of Rule 22c-2
Document Desc: 
On October 20, 2016, CMFI submitted a comment letter to the SEC, as a part of the agency's review of Rule 22c-2, which permits mutual funds to receive information from broker-dealers and other financial intermediaries about the identities and transactions of fund shareholders transacting through omnibus accounts. CMFI recommended that Rule 22c-2 be amended to require that this information be shared with mutual funds on a daily basis, instead of upon request.
Document Title: 
CMFI Comment Letter to the Financial Stability Board
Document Desc: 
On September 20, 2016, CMFI submitted a comment letter on omnibus accounts to the Financial Stability Board (FSB), based in Basel, Switzerland. The FSB recently released a consultation document asking for comment on whether international regulators should be providing additional tools for mutual funds to better manage their liquidity risks, especially in times of severe market stress. CMFI believes that many effective tools--such as redemption fees and gates--only will work if regulators also permit funds to have transparency within omnibus accounts.
Document Title: 
CMFI Comment Letter on Proposed SEC Transfer Agent Rules
Document Desc: 
On April 15, 2016, CMFI filed a comment letter with the SEC on its proposed transfer agent rules. CMFI advocated that the SEC require broker-dealers to provide mutual funds with omnibus account transparency to ensure the proper application of regulatory rules and compliance with prospectus policies and procedures.
Document Title: 
CMFI Files Comment Letter on Proposed SEC Liquidity Risk Management Programs
Document Desc: 
On January 18, 2016, CMFI submitted a comment letter to the SEC regarding its proposals to improve liquidity risk management programs utilized by mutual funds. In its letter, CMFI stated its belief that the widespread use of omnibus accounts by broker-dealers and other financial intermediaries is an obstacle to proper and fair implementation of several of the SEC's regulatory proposals.
Document Title: 
CMFI Files Comment Letter on Labor Department Fiduciary Rules
Document Desc: 
On July 21, 2015, CMFI filed a comment letter with the U.S. Department of Labor on its regulatory proposals to amend the definition of fiduciary and to authorize exemptions to the ERISA prohibited transaction rules.
Document Title: 
CMFI Summary of Fund Industry Policies Regarding Omnibus Accounts
Document Desc: 
On June 10, 2015, CMFI updated its summary of the most recent prospectus filings of the 50 largest mutual fund groups, regarding their policies and procedures in overseeing omnibus accounts. This summary contains excerpts from the prospectus disclosures made by these fund groups. The public disclosures confirm that individual investors are not adequately protected within omnibus accounts controlled by broker-dealers and other third-party financial intermediaries.
Document Title: 
CMFI Comment Letter to Financial Stability Oversight Council
Document Desc: 
On March 23, 2015, CMFI submitted a comment letter to the Financial Stability Oversight Council, in response to its request for information on whether certain asset management products and activities may pose potential risks to the U.S. financial system.
Document Title: 
CMFI Letter to the White House Council of Economic Advisers
Document Desc: 
On February 17, 2015, CMFI sent a letter to Jason Furman, Chairman of the President's Council of Economic Advisers. The CMFI letter responds to a White House memorandum that describes conflicted sales load charges and revenue-sharing payments being made to broker-dealers in connection with the distribution of mutual fund shares.
Document Title: 
CMFI Sends Letter to Financial Stability Oversight Council
Document Desc: 
On November 14, 2014, CMFI sent a letter to the staff of the Financial Stability Oversight Council regarding its review of the potential risks of products and activities within the asset management industry. CMFI advocates that this review should include the business practices of those large broker-dealers that are marketing mutual fund shares and engaging in a blatant "pay to play" business model.
Document Title: 
CMFI Letter to FinCEN on Transparency in Anti-Money Laundering Programs
Document Desc: 
On October 8, 2014, CMFI sent a comment letter to the Financial Crimes Enforcement Network (FinCEN), regarding its proposed regulations to combat money laundering. CMFI's comment letter discusses the need for investor-level transparency within omnibus accounts, to ensure that FinCEN's regulatory objectives are met. The attachment to this comment letter, a paper describing the history of the NSCC Networking service, is available below.
Document Title: 
History of NSCC Networking
Document Desc: 
On October 3, 2014, CMFI updated its white paper describing the history of the National Securities Clearing Corporation's (NSCC) Networking Service, which is the most cost-effective processing platform available to provide investor-level transparency within broker-dealer-controlled omnibus accounts.
Document Title: 
SEC Response to CMFI Letter
Document Desc: 
On August 20, 2014, the SEC responded to CMFI's June letter regarding broker-dealer fees and omnibus accounts.
Document Title: 
CMFI Letter to SEC Director Andrew Bowden
Document Desc: 
On June 17, 2014, CMFI sent a letter to Andrew Bowden, Director of the SEC Office of Compliance Inspections and Examinations. This SEC Office is conducting a formal review of mutual fund distribution payments. CMFI urges in this letter that the SEC expand its review to include the business practices of large broker-dealers that are marketing mutual fund shares.
Document Title: 
CMFI Letter to Independent Trustees of Top 50 Fund Groups
Document Desc: 
On October 11, 2013, CMFI sent a letter to the Audit Committee Chairperson for each of the 50 largest mutual fund groups, urging independent trustees to investigate and address the problems that result from the use of omnibus accounts by large broker-dealers and other financial intermediaries.
Document Title: 
CMFI Summary of the Omnibus Accounting Policies of the 50 Largest Mutual Fund Groups
Document Desc: 
On April 14, 2013, CMFI updated its summary of the most recent prospectus filings of the 50 largest mutual fund groups, regarding their omnibus accounting policies. This summary contains excerpts from the prospectus disclosures made by these fund groups. These public disclosures confirm that individual investors are not adequately protected within omnibus accounts controlled by third-party financial intermediaries.
Document Title: 
History of NSCC Networking
Document Desc: 
On January 2, 2013, CMFI updated its document describing the history of the National Securities Clearing Corporation's Networking service, which dates back to 1989. This automated utility facilitates the exchange of customer account information between mutual funds and their financial intermediaries. Despite the significant operational efficiencies derived in using this service, large broker-dealers are trying to move investor accounts away from this system to a more segregated and non-transparent system of omnibus accounts. The use of omnibus accounts generates additional fee income for brokerage firms and results in harm to investors by increasing costs and making it impossible for mutual funds to ensure prospectus and regulatory compliance within these accounts.
Document Title: 
NICSA Response Letter to CMFI
Document Desc: 
On December 5, 2012, NICSA President Theresa Hamacher sent a letter to CMFI, in response to CMFI's comment letter on the NICSA white paper on omnibus account oversight, which was published in September 2012.
Document Title: 
CMFI Letter Regarding NICSA White Paper
Document Desc: 
On November 15, 2012, CMFI sent a letter to the National Investment Company Service Association (NICSA), commenting on a recent NICSA white paper on omnibus accounts. The CMFI comment letter advocated for a regulatory and operational framework that provides for full transparency within omnibus accounts, down to the individual investor level.
Document Title: 
NICSA Publishes White Paper on Mutual Fund Oversight of Omnibus Accounts
Document Desc: 
In September 2012, the National Investment Company Service Association (NICSA) published a white paper entitled, "Effective Intermediary Governance: Evolving Best Practices." This white paper discusses emerging best practices for mutual fund oversight of omnibus accounts maintained by broker-dealers and third-party recordkeepers.
Document Title: 
CMFI Letter to SEC Asset Management Unit
Document Desc: 
On August 6, 2012, CMFI sent a letter on omnibus accounting to the staff of the SEC's Asset Management Unit, within the agency's Enforcement Division.
Document Title: 
CMFI Summary of the Omnibus Accounting Policies of the 50 Largest Mutual Fund Groups
Document Desc: 
On May 24, 2012, CMFI updated its summary of the most recent prospectus filings of the 50 largest mutual fund groups, regarding their omnibus accounting policies. This summary contains excerpts from the prospectus disclosures made by these fund groups. These public disclosures confirm that individual investors are not adequately protected within omnibus accounts controlled by third-party financial intermediaries.
Document Title: 
CMFI Letter to Deloitte on Omnibus Accounts Study
Document Desc: 
On April 27, 2012, CMFI sent a comment letter to Deloitte about its recently released white paper on omnibus accounts. The letter discusses the CMFI reports and studies that analyze the cost and transparency issues caused by this broker-dealer accounting practice.
Document Title: 
Deloitte Paper on the Risks of Omnibus Accounting
Document Desc: 
On March 16, 2012, Deloitte released "The Omnibus Revolution: Managing risk across an increasingly complex service model." This paper discusses the growth of omnibus accounting within the mutual fund industry and the the regulatory and reputational risks that this type of distribution model creates for funds and their investors. The Deloitte paper contains an excellent description of the oversight and other issues involved in omnibus accounting by fund intermediaries.
Document Title: 
SEC Response to CMFI Letter on Omnibus Accounting
Document Desc: 
On January 17, 2012, the SEC sent a response to CMFI's recent letter to the SEC's Enforcement Division about the high costs of omnibus accounting. The SEC's letter states that the issues raised in the CMFI letter will be considered by the Enforcement Division staff, from the viewpoint of the agency's responsibilities under the federal securities laws. This SEC letter was sent by the Office of Market Intelligence within the Division of Enforcement.
Document Title: 
CMFI Letter to SEC Enforcement Division on Omnibus Accounting
Document Desc: 
On December 20, 2011, CMFI sent a letter to SEC Enforcement Division Director Robert Khuzami, regarding the fee structures being used to support omnibus accounting by large broker-dealers. CMFI encouraged the SEC to evaluate the fees being charged for subaccounting services being provided by these broker-dealers, as a part of the Enforcement Division's Mutual Fund Fee Initiative.
Document Title: 
CMFI Summary of the Omnibus Accounting Policies of the Largest Fund Groups
Document Desc: 
On June 10, 2011, CMFI updated its summary of the most recent prospectus filings of the largest mutual fund groups, regarding their omnibus accounting policies. These public statements confirm that investors are not adequately protected within third-party omnibus accounts.
Document Title: 
SEC Letter in Response to CMFI White Paper on Mutual Fund Account Fees
Document Desc: 
In September 2010, the SEC responded to the CMFI White Paper on mutual fund account fees.
Document Title: 
CMFI Letter to SEC Chairman Mary Schapiro on the Shareholder Costs of Hidden Mutual Fund Accounts
Document Desc: 
On August 18, 2010, CMFI sent a letter to the SEC, transmitting a copy of its latest White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by large broker-dealers and other intermediaries. This CMFI White Paper concluded that as much as $8.47 billion is being charged to fund shareholders each year to pay for shareholder servicing and record keeping activities in these hidden accounts.
Document Title: 
CMFI White Paper on the Shareholder Costs of Hidden Mutual Fund Accounts
Document Desc: 
On August 18, 2010, CMFI issued a White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by large broker-dealers and other intermediaries. This CMFI White Paper concluded that as much as $8.47 billion is being charged to fund shareholders each year to pay for shareholder servicing and record-keeping activities in these hidden accounts.
Upload Document: 
Document Title: 
CMFI Letter to SEC Chairman Mary Schapiro on the Shareholder Costs of Hidden Mutual Fund Accounts
Document Desc: 
On October 12, 2009, CMFI sent a letter to the SEC, transmitting a White Paper on the costs to shareholders of hidden mutual fund accounts managed by third-party financial intermediaries.
Document Title: 
CMFI White Paper on the Shareholder Costs of Hidden Mutual Fund Accounts
Document Desc: 
On October 12, 2009, CMFI issued a White Paper documenting the costs to shareholders of hidden mutual fund accounts managed by third-party financial intermediaries. This CMFI White Paper concluded that as much as $9.6 billion is being taken from fund shareholders each year to pay for shareholder servicing and recordkeeping activities in these accounts.
Document Title: 
SEC Letter in Response to CMFI White Paper on Risks in Hidden Shareholder Accounts
Document Desc: 
On June 23, 2009, SEC Chairman Mary Schapiro sent a letter in response to the CMFI White Paper on the risks inherent in hidden mutual fund accounts.
Document Title: 
CMFI Letter to SEC Chairman Mary Schapiro on Market Timing and Other Risks in Hidden Shareholder Accounts
Document Desc: 
On May 6, 2009, CMFI sent a letter to the SEC enclosing a White Paper on the risks to long-term shareholders of hidden mutual fund accounts.
Upload Document: 
Document Title: 
CMFI White Paper on Market Timing and Other Risks in Hidden Shareholder Accounts
Document Desc: 
On March 30, 2009, CMFI issued a White Paper on the risks to long-term shareholders of hidden mutual fund accounts.
Upload Document: 
Document Title: 
SEC Letter to CMFI on Omnibus Accounts
Document Desc: 
On January 16, 2009, the SEC sent a letter in response to CMFI’s letter to SEC Chairman Christopher Cox on the regulatory problems with omnibus accounts.
Upload Document: 
Document Title: 
CMFI Letter to SEC Chairman Christopher Cox on Omnibus Accounts
Document Desc: 
On December 15, 2008, CMFI sent a letter to the SEC advocating that the Commission address: (a) regulatory gaps in the use of omnibus accounts, and (b) the lack of disclosure regarding third-party distribution payments.
Document Title: 
SEC Letter in Response to CMFI Letter on Technology and Omnibus Accounts
Document Desc: 
On November 9, 2005, the SEC sent a letter in response to CMFI’s letter to SEC Chairman Christopher Cox, regarding the use of technology to address problems caused by omnibus accounts.
Upload Document: 
Document Title: 
CMFI Letter to SEC Chairman Christopher Cox on the Use of Technology to Protect Individual Investors
Document Desc: 
On October 20, 2005, CMFI sent a letter to SEC Chairman Christopher Cox regarding the use of technology to resolve the problems caused by omnibus accounting and to protect the interests of individual investors.
Upload Document: 
Document Title: 
SEC Response to CMFI Letter on Omnibus Accounts
Document Desc: 
On December 22, 2003, the SEC responded to CMFI’s letter advocating more transparency within broker-dealer omnibus accounts.
Upload Document: 
Document Title: 
CMFI Letter to SEC Chairman William Donaldson Regarding Omnibus Accounts
Document Desc: 
On December 12, 2003, CMFI sent a letter to SEC Chairman William Donaldson regarding the need to provide full transparency within third-party omnibus accounts, in order to ensure that mutual fund shareholder receive uniform application of a fund’s policies and procedures.
Upload Document: