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GAO-01-655R 1 (2001-05-03)

handle is hein.gao/gaocrptanin0001 and id is 1 raw text is: SGAO Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 May 3, 2001 The Honorable John D. Dingell Ranking Minority Member Committee on Energy and Commerce House of Representatives Subject: SEC's Report Provides Useful Information On Mutual Fund Fees And Recommends Improved Fee Disclosure Dear Mr. Dingell: This letter responds to your request that we comment on the findings and recommendations in the December 2000 Report on Mutual Fund Fees and Expenses by the Securities and Exchange Commission's (SEC) Division of Investment Management. In this report, the SEC staff presents the results of its own analysis of the trend in mutual fund fees, including the results of its statistical analyses that identified how various fund characteristics affect fee levels. In addition, the report describes the approaches the SEC staff proposes be taken in response to the recommendation in our report Mutual Fund Fees: Additional Disclosure Could Improve Price Competition (GAO/GGD-00-126, June 7, 2000). In this letter, we discuss the findings of the SEC staff's report and compare them to those of our report. We also comment on the SEC staff's proposed response to our recommendation calling for additional disclosure of fee information to mutual fund investors. Results in Brief The results of the SEC staff's comprehensive statistical analyses and other findings generally corroborate the findings of our own report and provide considerable additional information regarding the trend in mutual fund fees. The SEC staff's report also contains several staff recommendations to the agency's Commissioners, and Commission approval has already been granted to recommendations relating to after-tax return disclosure and fund governance. In response to our recommendation that mutual fund investors' quarterly account statements disclose the specific dollar amount of fees they paid, SEC staff recommends that investors receive additional fee information in funds' annual and semiannual reports. The SEC staff's proposal would provide investors with additional information regarding fees in a form that facilitates comparison among funds. However, it will not provide information specific to each investor, nor will it be provided in the most frequent and relevant source -the quarterly statement. Therefore, it may be less likely to increase investor awareness GAO-01-655R SEC's Report on Mutual Fund Fees

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