SEC Probes Morgan on Index Fund Fees
Morgan Stanley, the second-biggest U.S. securities firm, is being investigated by the Securities and Exchange Commission over fees it charges on some index funds, according to an SEC filing Tuesday.
The probe into index fund pricing is part of the SEC’s inquiries into fee and revenue sharing, Morgan Stanley said. The agency also wants to know “the process by which those fees were determined,” the filing said.
Index funds are less costly to run because fund managers simply need to try to mimic a benchmark. Morgan Stanley charges an annual fee of 1.5%, and competitor Vanguard Group charges 0.18%, according to Bloomberg data.
Andrea Slattery, a Morgan Stanley spokeswoman, declined to comment.
Separately, brokerage A.G. Edwards Inc. said regulators had requested information on mutual fund trading within variable annuities.
The company disclosed the inquiry in its quarterly filing with the SEC on Monday, without specifying the regulators.
A.G. Edwards spokeswoman Margaret Welch wasn’t available to comment, an assistant said.
The filing also said A.G. Edwards suspended one employee in connection with a regulatory review of its auction-rate securities operation.
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