On 21 July, the Securities and Exchange Commission announced proposals that made changes in the structure of the fund-fees. The alterations were specifically made to the capping on the mutual funds as to the limit that can be charged to the clients for the selling costs, which are connected with the products.

The latest reports confirm that post the proposals, the move by the SEC is widely being condemned by the fund-industry observers.

As per the plans of the SEC that are subject to a 90-day comment period, the changes have been made to the 12b-1 fees and the sales load. However, it is post the 90-day period that the changes would be official.

As per the proposals, the cap of the 12b-1 fees would be fixed at 0.25% of assets and the fees would be renamed as marketing-and-service charges.

Also, the proposal recommends that the brokerages would have the final say as to how much would be charged for upfront sales loads. This has been suggested in the hope that the same would prompt price competition and would also bind the ongoing sales charges at par with the upfront sales charges.

The proposals have been criticized as the problem lies that the plans do not acknowledge the revenue sharing between the funds and the brokerages. Further, this area of the industry has very little transparency.

Further, worries that the firms would balance the reduced distribution fees by making use of the revenue-sharing agreements further increased the blaze of criticism.

Countering the criticism, the SEC said in a release, "We are continuing to consider further rule amendments related to revenue sharing".