Market timing and late trading may have dominated headlines in the past few months, but the mutual-fund industry has one more thing to worry about. Regulators are beginning to delve into the assignment of breakpoints, or discounts that mutual funds offer shareholders for investing a certain amount of money in one mutual-fund family. Breakpoints have come under public scrutiny following a joint inspection conducted by the National Association of Securities Dealers, the New York Stock Exchange and the Securities and Exchange Commission. In an examination conducted between November 2002 and January 2003, of 43 registered broker/dealers that sell mutual funds with a front-end sales load, it was found that, "Most of the firms examined, in some instances, did not provide customers with breakpoint discounts for which they appear to have been eligible," according to the staff report issued by the three organizations.
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