Processing Fees Resource Center

Most shareholders of registered investment companies hold fund shares through intermediaries. This means that fund records only identify the intermediary as the record owner, and the fund has limited information about the underlying beneficial shareholders. As a result, funds have no ability to communicate directly with many shareholders, and must rely on intermediaries to deliver fund materials, such as shareholder reports and prospectuses.

The Securities and Exchange Commission’s rules require funds to reimburse intermediaries for “reasonable expenses” incurred in forwarding fund materials to beneficial owners of fund shares. The New York Stock Exchange rules contain a fee schedule that sets forth maximum permissible processing fees. Intermediaries virtually always outsource delivery of fund materials to a fulfillment vendor, which then invoices the fund for the expenses.

This resource center contains the latest news, statements, and policy work around the issue of processing fees.