SEC hints at 2015 priorities

Sellers of so-called L-series funds will find themselves under the watchful eye.

SEC hints at 2015 priorities
In other North American advisory news Reuters reports yesterday that the SEC, in the midst of determining its so-called "examination priorities" for 2015, will go after expensive mutual fund fees.  

Each year SEC officials from across the nation gather in Washington to pin down the regulatory priorities for the coming year. Early reports from the meeting seem to suggest the regulators are going to look at expensive “L-series” mutual funds and individual broker offices selling large volumes of these products.  

Reuters garnered news of the direction from a recent conference in New York where Kevin Goodman, head of the broker-dealer examination for the SEC, was speaking to a group of securities industry compliance professionals. Apparently, a key priority in 2015 will be mutual funds with huge fees attached. Goodman specifically mentioned the "explosion" of L-shares, a type of mutual fund. "We want to make sure these share classes aren't being chosen or marketed based on the higher commissions they generate," Goodman was quoted as saying.

The SEC also seemed ready to ramp up its focus on brokerage firm branch offices. Offices that could attract attention would be those selling an “unusual amount of risky complex securities.” As well, brokerages and brokers that have a history of disciplinary violations will be targeted. "We want to target firms that seem to be homes for problematic (brokers)," Goodman was quoted as saying.