WASHINGTON -- The National Association of Securities Dealers has submitted to the U.S. Securities and Exchange Commission recommendations from its Mutual Fund Task Force. NASD said it submitted recommendations regarding mutual fund portfolio transaction costs, including directed brokerage arrangements, soft dollars and disclosure.
Soft dollars are payments made to a brokerage firm for its services through commission revenue as opposed to actual cash payments.
The recommendations include narrowing the types of research services that may be obtained with soft dollars, expanding the disclosure in fund prospectuses about soft dollar practices and portfolio transaction costs, providing more explicit guidance about the types of information that fund boards should receive about soft dollar practices and portfolio transaction costs, in addition to considering soft dollar issues raised by other managed advisory accounts, such as hedge funds.
The second phase of the task force's assignment, which will focus on mutual fund distribution arrangements, is expected to take several months to complete.
NASD's Mutual Fund Task force was named last May to help inform SEC rule proposals regarding mutual fund cost disclosure and distribution arrangements.
