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Progress Made on Implementation of Breakpoint Taskforce Recommendations
Washington, DC, April 5, 2004 - The NASD recently published a status report of the progress that has been made towards implementing the Joint NASD/Industry Task Force to address errors in providing breakpoint discounts to investors in connection with the purchase of mutual fund shares.
In July 2003, the Task Force on breakpoints issued a report setting forth 13 recommendations to address errors and failures in providing breakpoint discounts to investors. The report called for voluntary implementation of the recommendations, and encouraged the SEC and self-regulatory organizations to monitor implementation efforts.
According to the status report, “the financial industry has taken the steps necessary to fully implement seven of the Task Force’s thirteen recommendations,” including:
- mutual fund prospectus and website disclosure;
- standardized checklists or order verifications;
- record of linkage information;
- prospectus disclosure regarding the customer’s role in assisting a broker-dealer in securing breakpoint discounts;
- written disclosure statement;
- registered representative training; and
- investor education.
The status report discusses how each of these recommendations was implemented and, where appropriate, provides a website address where more detailed information may be found regarding the implementation.
The Investment Company Institute strongly supports efforts to ensure that the nation's mutual fund shareholders receive the appropriate discounts on eligible purchases through intermediaries of mutual fund shares with front-end sales loads. The Institute is a member of the task force established by the NASD to recommend measures to ensure that mutual fund investors are charged the correct sales charges on mutual fund transactions.
The Institute also offers a free online guide to help investors ensure that they receive the proper discounts when they purchase mutual funds.
- ICI Comments on Enhanced Breakpoint Disclosure Requirements, February 2004
- ICI Comments on Enhanced Breakpoint Disclosure Requirements, November 2003
- Fund Industry Committed to Ensuring Investors Receive "Breakpoints" Offered by Mutual Funds, July 2003
- NASD Requires Members to Assess Procedures for Providing Breakpoint Discounts, March 2003
- Joint Report Examines Procedures for Providing Breakpoints to Fund Shareholders, March 2003
- ICI Offers Free Online Guide to Help Investors Understand Mutual Fund Breakpoints, February 2003
- ICI Participates in NASD Breakpoint Task Force, February 2003
- ICI Supports Efforts to Ensure Intermediaries Properly Charge Fund Investors, January 2003
- Institute Corresponds with NASD on Sales Charge Breakpoints, January 2003
- Fund Industry Strongly Supports Efforts to Protect Investors from Overcharges, January 2003
- Background Information on Mutual Fund Breakpoints
- Understanding Mutual Fund Breakpoints