In mid-October the SEC's Div. of Investment Management posted a series of FAQs designed to address potential conflicts of interest arising from certain types of adviser compensation. Noting that "Compensation that an investment adviser, its affiliates or its associated persons receives in connection with the investments it recommends and related services it provides can result in the investment adviser having interests that conflict with those of its clients. Many investment advisers appear to have recognized these conflicts and responded through practices designed to address them, including through elimination, disclosure or a combination of disclosure and mitigation. However, SEC examinations staff have observed and enforcement cases have illustrated that, in some instances, investment advisers have not appropriately addressed these conflicts of interest." Noting that Rule 12b-1 payments and revenue sharing arrangements are among the more obvious potential conflict situations, the SEC also noted potential conflicts can arise from "an investment adviser’s direct or indirect receipt of service fees from its clearing broker-dealer, marketing-support payments from a mutual fund’s investment adviser, transaction fees, or receipt of payments from a mutual fund’s investment adviser to help defray the costs of educating and training its personnel regarding certain investment products." The FAQs then proceed to expand on these points. Please click on the heading to this summary to access the full SEC version of the FAQs.