September 10, 2004
BB 04—93

SEC to Review 12b-1 Fees and Releases Final Directed Brokerage Rule

The Securities and Exchange Commission (SEC) staff will review a number of alternatives and suggestions relating to 12b-1 fees discussed in approximately 1,650 comment letters received by the SEC in response to a request for comment on the need for further amendments to rule 12b-1. The SEC requested comments on 12b-1 in its proposed rule on directed brokerage that was finalized and published in the Federal Register on September 9. The SEC received only 33 comment letters on the directed brokerage rule itself.

According to the preamble to the final rule, the SEC did not adopt any further changes to rule 12b-1 but has asked its staff to explore some of the recommendations on 12b-1 contained in the comment letters. One approach to be reviewed would refashion rule 12b-1 to provide that funds deduct distribution-related costs directly from shareholder accounts rather than from fund assets. The preamble noted that commentators also addressed concerns regarding revenue sharing.

For more information on this issue, please contact Jan Jacobson, the Council's director, retirement policy, at 202-289-6700.


The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.