29 November 2004

IOSCO: Final Report on fees and expenses of Investment Funds

The International Organisation of Securities Commissions (IOSCO) completed a review of existing practices with respect to fees and expenses in investment funds. Fees and expenses have long been a concern for regulators, and many jurisdictions are in the process of revising their approaches to these issues.

All regulators consider that it is both appropriate and necessary to take regulatory steps in the area of fees and expenses. Regulatory steps rely on a combination of general principles, disclosure requirements, prohibited practices and precise rules. This combination varies among regulators depending on their regulatory framework and on their assessment of the issues raised by fees and expenses.

The paper aims at identifying common international best practices standards in the area of fees and expenses in investment funds. These best practice standards deal with issues that were identified at this stage as key issues. The standards are not intended to serve as comprehensive requirements for the regulation of fees and expenses or to impose any obligation on any member.

Generally, they reflect a level of common approach currently acknowledged by regulators in some areas. However, the paper does not identify all possible regulatory issues concerning investment funds' fees and expenses. Further, given the public interest in this topic, it is likely that additional extensive regulatory approaches or best practices are likely to emerge.

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