- All agreements concerning revenue sharing payments; and
- Data regarding each mutual fund that made revenue sharing payments due to the share class in which the advisory client assets were held.
According to a copy of the SEC’s letter, if regulators believes a firm’s disclosures have been inadequate, the Enforcement Division may focus on the following issues:
- why the firm didn’t self-report;
- why the firm’s conduct resulted in inadequate disclosures; and
- why any subsequent remedial efforts taken by the firm.
This time around, SEC enforcement actions will likely allege fraudulent disclosures, breach of fiduciary duty and best execution failures, attorneys said.
“The other shoe has dropped,” is how Eversheds Sutherland described the SEC’s latest share-class initiative.