Under SCSD, the Enforcement Division will recommend standardized, favorable settlement terms to investment advisers who self-report that they failed to disclose conflicts of interest. This applies to the receipt of 12b-1 fees by the adviser, its affiliates, or its supervised persons for investing advisory clients in a 12b-1 fee paying share class when a lower-cost share class of the same mutual fund was available for those clients. In these cases, the Enforcement Division recommends settlements that will not impose a civil monetary penalty while requiring participating advisers to return ill-gotten gains.

The complete FAQ regarding the SCSD is available here. The cut-off date for self-reporting under the initiative is June 12. Questions can be directed to SCSDInitiative@sec.gov.

Sources:

SEC Enforcement Division Issues FAQs for Share Class Selection Disclosure Initiative (www.sec.gov)
Share Class Selection Disclosure Initiative - FAQs (www.sec.gov)
Share Class Selection Disclosure Initiative (www.sec.gov)