WASHINGTON — The Securities and Exchange Commission will host a roundtable discussion June 19 on issues surrounding Rule 12b-1 under the Investment Company Act of 1940.

Rule 12b-1 permits mutual funds to use fund assets to finance the distribution of their shares. The roundtable will consist of panels addressing the historical circumstances that led to the promulgation of Rule 12b-1, and the original intended purpose of the rule; the evolution of the uses of Rule 12b-1 and the rule's current role in fund distribution practices; the costs and benefits of the current use of Rule 12b-1; and the options for reform or rescission of Rule 12b-1.

"When the Commission adopted Rule 12b-1 more than a quarter century ago, the idea was that 12b-1 fees would be a temporary solution to address specific distribution problems, as they arose. But today's uses of 12b-1 fees have strayed from the original purposes underlying the rule, and it is time for a thorough re-evaluation," said SEC Chairman Christopher Cox. "This roundtable will help us review current uses of 12b-1 fees, how those fees impact retail investors, and the interests and concerns of independent directors, who must approve 12b-1 plans."