On February 10, 2014, Fund Action reported on recent statements made by Doug Scheidt, Chief Counsel of the Division of Investment Management, about the SEC’s ongoing examinations of sub-transfer agency payments. According to the article, Mr. Scheidt stated that the sub-transfer agency examinations had raised particular concerns about illegal distribution payments through omnibus accounts and, accordingly, he saw three courses of action open to the SEC: (1) enforcement actions in “extreme cases”; (2) guidance “in other cases”; or (3) a new distribution rule based on “current issues of the day.” As noted in the article, Mr. Scheidt did not detail the contents of a potential rule, but has said that the SEC does have statutory authority to make brokers tell funds what they are paying for and, while the SEC does not have statutory authority over non-broker intermediaries that use omnibus accounts, it could prohibit funds from making payments to these other intermediaries.