Don Crawshaw Authors Article on Recharacterization for Review of Securities & Commodities Regulation

September 30, 2013

Mr. Crawshaw authored an article in Volume 46, No. 15 of the Review of Securities & Commodities Regulation entitled, “Recharacterization of Payments by Mutual Funds and Advisers to Distributors.” The article discusses a 2013 examination priority of the SEC’s Office of Compliance Inspections and Examinations – “Payments for Distribution in Guise.” The article reviews the positions of the SEC’s Division of Investment Management on the issue of whether some part of payments by mutual funds and advisers to fund distributors for a variety of services, such as sub-transfer agency and shareholder servicing, are made without compliance with Rule 12b-1 under the Investment Company Act, and fund board oversight over these payments. Among the issues covered are the SEC’s guidance on how to analyze “bundled” payments for distribution and non-distribution services, the FINRA fee limits and the challenges that supervision of intermediaries present to mutual fund boards.