The staff also described the factors that a board of directors wishes to consider when assessing under-accounting fees related to distribution services. In particular, the IM employee referred to factors described in his 1998 letter to the Investment Company Institute – the “supermarket letter” – regarding the use of active funds of funds to pay for participation in the sales platforms of financial intermediaries. The Staff acknowledged, however, that not all of the factors mentioned in the supermarket letter could be relevant to the analysis of a particular chamber. [4] In addition to the factors mentioned in the supermarket letter, the IM employee explained that a board of directors might also consider requesting additional information from the consultant and other service providers, including: In particular, the staff warned that, in some cases, so-called sub-transmission services, administrative and accounting services and other shareholder services (all non-distributor services) would be used to pay for , directly or indirectly, for the mutual financing of fund distribution activities. [2] The Staff also reminded investment advisors and other relevant service providers of their obligation to provide boards with sufficient information to support the board`s evaluation process. The guidelines were informed by a recent review of “fairing distribution” payments and followed a recent SEC action against an investment advisor, which required a fund to pay certain distribution activities outside a Rule 12b-1 plan. [3] In some cases, an entity may create its own third-party distribution unit in order to cooperate with the investment company for the distribution of investment funds. Independent distributors are also available with a number of services offered to investment fund companies. Third parties work with investment firms to sell investment funds. Third-party suppliers generally have large sales and international teams to distribute the investment funds of the investment company.
Distributors also have a large distribution network and know-how in the distribution of investment funds. MFEX continually adds new fund agreements on behalf of its clients As a distributor, the company is working with the investment firm to develop a marketing plan for the distribution of the investment fund. Third-party suppliers typically work with staff distribution representatives with global distribution networks. They can be responsible for the sale of individual funds and work with brokers to ensure the distribution of funds via electronic brokerage platforms. MFEX manages a unique distribution agreement with each distributor and allows access to all of our fund partners Earlier this month, Employees of the U.S. Securities and Exchange Commission`s (SEC) Investment Management Department (IM) have released an update on the role of investment fund administrators in payments of fund assets to brokers and other financial intermediaries that provide shareholder and omnibus registration account services. The trend towards the use of omnibus accounts has increased markedly in recent years. [1] The Staff found that examples of these services – often referred to as accounting services – include communication with intermediaries clients of financial intermediaries about their investments in funds; Managing financial records Processing changes to receivables Processing bargaining orders Managing customer data Answering clients` questions about their accounts and the cashing process Bank statements, tax documents, business confirmations.
