Subject: File No. S7-15-10
From: David Hensley
Affiliation: Principal, Asset Protection Network, Inc.
October 11, 2010
The rules being proposed such as:
My observation is all of these rules will adversely impact many of our clients by forcing them into higher costs over the long term in fee based accounts, my representatives I supervise will have their business model destroy, and it most likely will negatively impact INVEST Financial, my broker dealer.
- Renaming 12b-1 to enhance transparency for investors.
- Adopting additional disclosures of 12b-1 fees through confirmation statements, prospectus, and a point-of-sale of sale documents.
- Leaving Class A-share mutual funds largely unchanged by establishing a 25 bps safe harbor for 12b-1 fee payments.
- Treating additional 12b-1 fee amounts (e.g., 75 bps of the typical Class C-share fund trail) on future sales of mutual funds to a cap equal to:
- The maximum Class A-share load for funds with A-shares, or
- The caps established by NASD Rule 2830(d) (i.e., as much as 8.5%) if the fund does not have an A- share.
- Creating a new class of mutual funds shares that are issued at net asset value. The compensation paid on such mutual fund transactions would be the subject of negotiation.