Mutual Fund Directors Forum
Encyclopedia
The Mutual Fund Directors Forum (MFDF) is a non-profit organization serving independent mutual fund
directors in the United States.
(SEC) and the mutual fund industry. The Council was convened in 1999, in response to SEC chairman Arthur Levitt
's call for improved fund governance and better education of mutual fund directors.
Although all persons in the mutual fund industry are able to participate in the Forum's events, actual membership in the Forum is restricted to independent directors or trustees of mutual funds. Today, the Forum's primary activities are the creation and production of educational programs, the publication of reports on best practice guidance, and advocacy on behalf of its members. For example, in 2003, the Forum was asked by the then SEC Chairman William H. Donaldson
to prepare best practice guidance in key areas of director decision-making, such as monitoring fees and conflicts, overseeing compliance, and important issues such as valuation and pricing of fund portfolio securities and fund shares. In response to this request, the Forum published its "Report of the Mutual Fund Directors Forum on Best Practices and Practical Guidance for Mutual Fund Directors" in July 2004. The report was well-received by the SEC.
Frequently, members of the Forum's staff are consulted and quoted by the financial press in news stories concerning mutual fund directors and the mutual fund industry as a whole. In addition, op-ed
letters by Forum staff on topics important to the mutual fund industry have appeared in the Wall Street Journal and mutual fund industry publications.
Significantly, in 2002, the Mutual Fund Directors Forum applied for and received an exemptive order from the SEC allowing the payment by mutual funds, pursuant to the authorization of their boards of directors, of the dues of their independent directors for membership in the Forum, as well as Forum-related expenses; and finding that that these payments do not violate Section 17(d) and Rule 17d-1 of the Investment Company Act of 1940
, which prohibit funds from participating in joint transactions with affiliated persons on a basis different from or less advantageous than that of any other participant.
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
directors in the United States.
Overview
The MFDF was formed in 2002, growing out of the Mutual Fund Directors Education Council, a partnership between the United States Securities and Exchange CommissionUnited States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
(SEC) and the mutual fund industry. The Council was convened in 1999, in response to SEC chairman Arthur Levitt
Arthur Levitt
Arthur Levitt, Jr. was the twenty-fifth and longest-serving Chairman of the United States Securities and Exchange Commission from 1993 to 2001. Widely hailed as a champion of the individual investor, he has been criticized for not pushing for tougher accounting rules. Since May 2001 he has been...
's call for improved fund governance and better education of mutual fund directors.
Although all persons in the mutual fund industry are able to participate in the Forum's events, actual membership in the Forum is restricted to independent directors or trustees of mutual funds. Today, the Forum's primary activities are the creation and production of educational programs, the publication of reports on best practice guidance, and advocacy on behalf of its members. For example, in 2003, the Forum was asked by the then SEC Chairman William H. Donaldson
William H. Donaldson
William Henry Donaldson was the 27th Chairman of the U.S. Securities and Exchange Commission , serving from February 2003 to June 2005...
to prepare best practice guidance in key areas of director decision-making, such as monitoring fees and conflicts, overseeing compliance, and important issues such as valuation and pricing of fund portfolio securities and fund shares. In response to this request, the Forum published its "Report of the Mutual Fund Directors Forum on Best Practices and Practical Guidance for Mutual Fund Directors" in July 2004. The report was well-received by the SEC.
Frequently, members of the Forum's staff are consulted and quoted by the financial press in news stories concerning mutual fund directors and the mutual fund industry as a whole. In addition, op-ed
Op-ed
An op-ed, abbreviated from opposite the editorial page , is a newspaper article that expresses the opinions of a named writer who is usually unaffiliated with the newspaper's editorial board...
letters by Forum staff on topics important to the mutual fund industry have appeared in the Wall Street Journal and mutual fund industry publications.
Significantly, in 2002, the Mutual Fund Directors Forum applied for and received an exemptive order from the SEC allowing the payment by mutual funds, pursuant to the authorization of their boards of directors, of the dues of their independent directors for membership in the Forum, as well as Forum-related expenses; and finding that that these payments do not violate Section 17(d) and Rule 17d-1 of the Investment Company Act of 1940
Investment Company Act of 1940
The Investment Company Act of 1940 is an act of Congress. It was passed as a United States Public Law on August 22, 1940, and is codified at through . Along with the Securities Exchange Act of 1934 and Investment Advisers Act of 1940, and extensive rules issued by the Securities and Exchange...
, which prohibit funds from participating in joint transactions with affiliated persons on a basis different from or less advantageous than that of any other participant.