Eaton Vance last week became the second closed-end fund firm this year to end its additional compensation deal with Merrill Lynch. Additional compensation arrangements allow an underwriter for a closed-end fund's initial public offering to be compensated by the fund's sponsor for years after the launch.

Eaton Vance paid Merrill Lynch $45.7 million to end the agreements on 22 of its funds. Cohen & Steers said in April that it had paid Merrill $72 million for seven funds. A Cohen & Steers official did not return a phone call. The price depends on the size of Merrill's role in the underwriting.

William Steul, cfo at Eaton Vance, called the decision strictly a financial one and said the move benefits both sponsor and underwriter. He said the decision benefits the fund firm because it eliminates the future costs of making the payments, while providing a boost in capital to the underwriter in the near term. Asked why Eaton made the change now, Steul said there was "no particular reason" for the timing.

Closed-end funds also compensate underwriters through a structuring fee, which is paid up front. Steul said he expected more changes similar to Eaton Vance's by other firms in the industry.