IOSCO Report Identifies Good Practices for Fund Fees and Expenses

An IOSCO Board final report identified examples of good practice applicable to Collective Investment Scheme ("CIS") fees and expenses.

In the published report, IOSCO incorporated and enhanced certain practices identified in a 2004 IOSCO report. The new report recommended practices that:

• define permitted and prohibited costs and how new or increased fees should be approved and/or communicated to investors;

• provide more detail on the calculation of performance fees;

• summarize information to investors on key elements of fees and expenses;

• provide for the use of electronic media for disclosing information to investors about fees and expenses;

• provide more disclosure about types of costs charged to CIS as transaction costs;

• provide ways to manage and disclose conflicts of interest in the use of soft commission arrangements;

• provide disclosure of how soft commission arrangements are used;

• provide for disclosure of double charging structures when one CIS invests in another; and

• provide more detail about keeping information on fees and expenses up to date and giving investors adequate notice of material changes.