The Securities and Exchange Commission voted unanimously Wednesday to propose new rules designed to revamp the sales and distribution fees some mutual funds charge and to provide better disclosures of them to investors.

The proposal would replace Rule 12b-1 that governs fees mutual fund companies sometimes charge to cover their funds’ distribution costs. It will be subject to a 90-day comment period upon publication in the Federal Register.

“Despite paying billions of dollars, many investors do not understand what 12b-1 fees are, and it’s likely that some don’t even know that these fees are being deducted from their funds or who they are ultimately compensating,” said SEC chairman Mary Schapiro. “Our proposals would replace rule 12b-1 with new rules designed to enhance clarity, fairness, and competition when investors buy mutual funds.”

Under the proposal, a company could not charge more in ongoing fees, known as asset-based sales charges, than the highest fee charged by another of the company’s funds using another type of fee — up-front, or “front-end,” sales charges — and has no ongoing sales charges.

“For example, if one class of the fund charges a 4% front-end sales charge, another class could not charge more than 4% in total to investors over time,” the SEC said in a fact sheet distributed ahead of the vote.

Unlike ongoing fees, front-end sales charges are already limited by Financial Industry Regulatory Authority rules.

The proposal would allow funds to continue to pay 0.25% per year out of their assets for advertising and sales compensation.

It also would improve the transparency of distribution fees by requiring funds to disclose any “ongoing sales charges” and any “marketing and service fees” in a fund’s prospectus, shareholder reports, and investor transaction confirmations.

Transaction confirmations also would have to describe the total sales charge rate that an investor will have to pay.

Meanwhile, the SEC’s proposal aims to encourage retail price competition by allowing funds to sell shares through brokers who determine their own sales compensation rather than under the terms established by the funds.

The fees were developed in the late 1970s when funds were losing investor assets faster than they were attracting them, and self-distributed funds were emerging as ways to pay for necessary marketing expenses.

While the fees amounted to an aggregate of just a few million dollars in 1980 when they were first permitted, that total has ballooned to $9.5 billion in 2009.

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