Rule 12b-1

Rule 12b-1 is a regulation from the U.S. Securities and Exchange Commission (SEC) that allows mutual funds to use investor money to pay for marketing and distribution expenses. This can include paying brokers or financial advisers who sell the fund. The rule aims to keep mutual funds competitive by allowing them to promote their products more effectively. However, it requires funds to clearly disclose these fees to investors, helping them understand how expenses may affect their investment returns over time. Essentially, it balances fund promotion with transparency for investors.