New SEC focus on fund expenses

New SEC focus on fund expenses
Download New SEC focus on fund expenses

A recent area of enforcement focus for the SEC is the practice of fund managers charging expenses to a fund that were outside of fees, expenses and liabilities agreed to in the fund's offering documents or prospectus. While public attention has focused on sizeable performance fees (e.g. 20% of new profits) charged by hedge fund managers, the current market crisis has turned attention to all fees and expenses charged to registered and unregistered funds. Questions of what constitutes legitimate fund expense and what expenses should be covered by a fund's management fees or otherwise born by the adviser loom large.