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U.S. Securities and Exchange Commission

Commission Announces Roundtable Discussion Regarding Rule 12b-1


Washington, D.C., May 29, 2007 - The Securities and Exchange Commission announced today that it will host a roundtable discussion next month on issues surrounding Rule 12b-1 under the Investment Company Act of 1940. Rule 12b-1 permits mutual funds to use fund assets to finance the distribution of their shares.

The roundtable will take place on June 19, 2007, and will consist of panels addressing

  • the historical circumstances that led to the promulgation of Rule 12b-1, and the original intended purpose of the rule;
  • the evolution of the uses of Rule 12b-1 and the rule's current role in fund distribution practices;
  • the costs and benefits of the current use of Rule 12b-1; and
  • the options for reform or rescission of Rule 12b-1.

"When the Commission adopted Rule 12b-1 more than a quarter century ago, the idea was that 12b-1 fees would be a temporary solution to address specific distribution problems, as they arose. But today's uses of 12b-1 fees have strayed from the original purposes underlying the rule, and it is time for a thorough re-evaluation," said SEC Chairman Christopher Cox. "This roundtable will help us review current uses of 12b-1 fees, how those fees impact retail investors, and the interests and concerns of independent directors, who must approve 12b-1 plans. The roundtable also will help us identify and evaluate the possibilities for reforming Rule 12b-1."

A final agenda and list of participants and moderators will be published closer to the date of the roundtable. The roundtable will begin at 9:00 a.m., e.d.t., and will be held in the Auditorium at the Commission's headquarters at 100 F Street, N.E., Washington, D.C. The roundtable will be open to the public with seating on a first-come, first-served basis. Doors will open at 8:30 a.m., and visitors will be subject to security checks. The roundtable discussion also will be available via webcast on the Commission's Web site at www.sec.gov.

The Commission welcomes feedback regarding any of the topics to be addressed at the roundtable, and we will provide a list of specific issues we would like the public to address. The information that is submitted will become part of the public record of the roundtable. Submissions to the Commission may be provided by any of the following methods:

Electronic submissions

Paper submissions

  • Send paper submissions in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090.

All submissions should refer to File Number 4-538. This file number should be included on the subject line if e-mail is used. To help process and review your submissions more efficiently, please use only one method. The Commission will post all submissions on the Commission's Web site at www.sec.gov.

Please note that all submissions received will be posted without change; the SEC does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly.

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Modified: 05/29/2007