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FINRA Proposes Revisions To Its Mutual Fund Cash Compensation Disclosure Rules

May 18, 2011

By The Investment Management Practice

After a number of fits and starts, and a multi-year rulemaking process, FINRA has proposed to significantly revise its investment company sales compensation disclosure rule, FINRA Rule 2830, in a way that would move revenue sharing disclosure from fund prospectuses and statements of additional information (SAI) to the point of sale and to the internet (or made available over the phone). Generalized disclosure of revenue sharing arrangements and associated conflicts would be required to be disclosed by the broker-dealer at the point-of-sale. Detailed disclosure of revenue sharing and other cash compensation arrangements would have to be maintained on an internet web site (or made available telephonically) and updated at least annually.

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Image: Michael R Rosella
Michael R Rosella
Partner, Corporate Department
Image: Arthur L Zwickel
Arthur L Zwickel
Partner, Corporate Department
Image: Christian Parker
Christian Parker
Partner, Corporate Department
Image: David A Hearth
David A Hearth
Partner, Corporate Department