MFDF - Mutual Fund Directors Forum - SEC Issues Wells Notice Over Distribution Payments test

Member Login

Request an account

Sample Banner 1

SEC Issues Wells Notice Over Distribution Payments

In a recent filing, William Blair announced that it had received a Wells notice from the SEC regarding shareholder administration fees paid by ten of its funds. A Wells notice from the SEC is not a formal action and is not necessarily followed by an enforcement action. According to the filing, the funds used an affiliated distributor and paid a fee of 15 basis points for “shareholder administration services.” The filing explained that William Blair was included in the SEC’s distribution-in-guise sweep originally launched in 2013, and that in November 2014, the SEC opened a subsequent investigation into the fees. The filing noted that William Blair “believes that any possible claims made by the staff would be without merit” and has responded to the Wells notice. However, the filing stated that “[i]n light of the preliminary concerns expressed by the SEC staff,” the shareholder administration fees paid by the funds at issue are currently being waived, and that the waiver will not be removed without the consent of the funds’ board.

In September 2015, the SEC and First Eagle settled the first set of charges to arise from the “distribution in guise” sweep. In January, the Division of Investment Management issued guidance regarding mutual fund distribution and sub-accounting fees. The Forum hosted webinars covering the First Eagle settlement and the recent guidance

  • All
  • Accounting and Audit
  • Advisory Contracts
  • Board Governance
  • Board Governance: Board Leadership
  • Board Governance: Compensation
  • Board Governance: Oversight of CCO
  • Board Governance: D&O Insurance
  • Board Governance: Self-Evaluation
  • Closed-end Funds
  • ETFs
  • Other Oversight
  • Other Oversight: Alternative Investments and Derivatives
  • Other Oversight: Custody
  • Other Oversight: Fixed Income funds
  • Other Oversight: Distribution
  • Other Oversight: Portfolio Trading
  • Other Oversight: Proxy Voting
  • Other Oversight: Securities Lending
  • Legislative News
  • Money Market Funds
  • Reference
  • Regulatory News
  • Risk
  • Shareholder Disclosure
  • Valuation
  • Webinars
  • Aaron New Tag