As if the news is not bad enough for record keepers (especially regarding several recent court decisions), one legal expert at Drinker Biddle questions whether these service providers may need to register with the SEC if they are receiving payments from mutual fund companies.
The SEC stated that it would “ask for information on third party administrators, and may use this information to consider whether entities that provide these services are appropriately registered or exempt from registration.” The question that seems to be piquing the agency’s interest is whether record keepers are receiving payments from mutual funds held in clients’ accounts to pay for services that the funds would have otherwise had to provide — and whether those payments are being made in compliance with the rules.
That's not all. In a separate article in Drinker Biddle’s recent ERISA Newsletter for Retirement Plan Service Providers, lead ERISA counsel Fred Reish questioned whether record keepers need to update 408(b)(2) disclosures when fund changes affect revenue sharing payments.
