SEC’s Division of Enforcement Announces Self-Reporting Program for Advisers Who Failed to Disclose Conflicts in Share Class Selection
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- The SEC has announced an initiative that will allow investment advisers to avoid a civil penalty if they self-report failures to disclose conflicts of interest in selecting or recommending mutual fund share classes.
- Advisers that recommend to clients share classes with 12b-1 fees should immediately consult with experienced SEC counsel to evaluate whether current conflicts disclosures are inadequate in light of the advisers’ share class recommendation practices.
- An adviser’s decision whether to self-report under the SCSD Initiative should consider whether the settlement will trigger any collateral consequences.