Collateral Consequences and US Securities and Exchange Commission Mutual Fund Share Class Selection Self-Reporting Initiative

After completing a successful self-reporting initiative—the Municipalities Continuing Disclosure Cooperation Initiative (MCDC Initiative)—the Division of Enforcement (Enforcement) of the US Securities and Exchange Commission (Commission) recently announced another self-reporting initiative—the Share Class Selection Disclosure Initiative (SCSD Initiative or the Initiative). Like the MCDC Initiative, the Commission is offering a standardized, favorable settlement in exchange for self-reporting under the SCSD Initiative; however, firms should be aware that the settlements offered under the SCSD Initiative do carry collateral consequences that should be considered, and planned for, in connection with a firm’s submission of a self-report under the Initiative.