Fund Fee Discount Rule Lives On: SEC's Smooth Extension
Published Date: 4/13/2026
Notice
Summary
The SEC is asking to extend the time they collect info about Rule 22d-1, which helps investment funds offer discounts on sales fees to certain investors. This rule makes sure everyone gets clear, timely info about these fee changes. It mainly affects investment funds and their investors, with no new costs or deadlines—just keeping the current system running smoothly.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Funds May Vary or Waive Sales Loads
Under Rule 22d-1 (17 CFR 270.22d-1), funds may schedule variations in or eliminate front-end sales loads for particular classes of investors or transactions if they meet the rule’s conditions. The rule permits such exemptions from Section 22(d) of the Investment Company Act of 1940 provided the variation is applied uniformly to the class and the notice and prospectus update conditions are met.
Required Notices When Sales Loads Change
Rule 22d-1 requires funds to give clear, timely notice when they schedule a variation or elimination of a front-end sales load. The rule’s notice requirements include: (1) applying the variation uniformly to all offerees in the specified class, (2) furnishing adequate information in registration statement form materials and updating the fund prospectus and statement of additional information before the variation is made available, and (3) advising existing shareholders of any new sales load variation within one year of first making it available (see 17 CFR 270.22d-1(a)-(d)).
Small Compliance Time Burden for Funds
The SEC estimates about 6,740 series currently issue redeemable securities with a front-end sales load; as many as 50% (approximately 3,370 series) may rely on Rule 22d-1 each year. The agency estimates the reporting/notice burden is about 0.25 hours per respondent and totals 843 hours annually for these series. The submission requests an extension of this existing information collection.
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Key Dates
Department and Agencies
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