New lawsuit and SRO proposals could affect CSA’s decision
After a year of intense debate over a ban on embedded commissions, all eyes are on the CSA
The low-load DSC option will continue to be available, and investors with existing standard DSC purchase option holdings will remain invested based on their mutual funds' redemption fee schedule
What regulators will decide to do on this remains unclear — and the discussions held on Monday did little to clarify the issue
Industry views diverge widely on the future of embedded fees
Both groups are in agreement that eliminating embedded commissions would have serious repercussions for dealers and their advisors
The organization recommends a variety of measures, including capping trailer fees, in response to the CSA’s consultation paper
New MFDA report also finds that a switch to direct-pay arrangements will “have a greater impact on those smaller advisors who are more reliant on DSCs”
The firm is also plans to cap or eliminate the fees and expenses associated with certain series in an effort to simplify its product offering
DSC is an expensive sales option for mutual fund companies