SEC issues FAQ on 12b-1 fees

October 25, 2019

In response to complaints about its Share Class Selection Disclosure Initiative, the Securities and Exchange Commission (SEC) has issued an FAQ that addresses disclosure obligations related to the types of compensation investment advisors receive, such as 12b-1 fees and revenue sharing.

The FAQ does not alter or amend applicable law and has no legal force or effect. The FAQ created no new or additional obligations.

However, the FAQ does recommend advisors consider rebating third-party revenue-sharing payments against clients’ account-level fees. Advisors must also report certain forms of compensation and conflicts of interest on Form ADV. Find out more.

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