Webinar Held on Rule 12b-1 Fees: Past, Present and Future
By R. Rosella, Mitchell Nichter, Domenick Pugliese, Bill Sullivan, Grace Carter and Joshua Hamilton
Perhaps no aspect of mutual fund regulation is currently undergoing closer scrutiny than Rule 12b-1 under the Investment Company Act of 1940. The Securities and Exchange Commission the Commission) has publicly announced that it is undertaking a complete review of Rule 12b-1, and most industry observers anticipate a Commission pronouncement regarding the Rule in 2007. In anticipation of this pronouncement, on October 11, 2007, Paul Hastings hosted a webinar on Rule 12b-1 featuring Matthew Fink, former President of the Investment Company Institute. Participants from Paul Hastings included Mike Rosella (moderator), Domenick Pugliese and Mitch Nichter from our Investment Management Practice Group, and Bill Sullivan, Grace Carter and Joshua Hamilton from our Securities Litigation Group. The participants reviewed the history of Rule 12b-1, the way in which 12b-1 fees are currently used, the duties of fund Boards of Directors, and current developments in the regulatory and litigation arenas. The participants also discussed their thoughts on what pronouncements the Commission may make in the area in both the short term and over the long term.