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MUTUAL FUND 12b-1 FEES
Overview
Provision in legislation (H.R. 2179) that bans collection of 12b-1 fees by registered openend investment companies (mutual funds) after such company has been closed to new investors, except for shareholder servicing activities.
Position
12b-1 fees are used for legitimate purposes even in funds closed to new investors. The ban on collection of 12b-1 fees is therefore unrealistically restrictive.
Status
This provision was added during the House Financial Services Committee markup of H.R. 2179 on February 26, 2004. The bill is currently awaiting action in the Rules Committee, and then, possibly, the House floor. No companion piece with such a provision is currently pending in the Senate.
