Fund directors are feeling the burden of increased compliance costs to the funds and the redemption fee rule is only adding to the pressure. "There is more pressure, not just with the compliance itself, but the cost of compliance and the impact that is having on the funds and shareholder returns," said Tom Westle, partner with Blank Rome

"Now we have a lot of costs--38a1 and now 22c2--all of which are increasing the daily and annual expenses of running the fund," Westle said. "For those companies that are trying to come up with the real 22c2 solution, that's going to be a direct pass through to the fund, just like the chief compliance officer was in many regards." He has heard prices of these services ranging from $20,000 to $100,000."Frankly they've got no choice," said Michael Rosella, partner with Paul Hastings. "Boards feel they have to do these things--either they required by law or are a best practice." Even the trustees of the large funds are very concerned about this, Westle said. But there isn't a lot directors can do. "They could ask the manager to bear more of the costs or put pressure on managers to continue to find good performance to offset overriding expenses," Westle said.

Westle is not sure the Securities and Exchange Commission really understood the costs when implement the rules. "They looked at what they think the cost of compliance is," he said. "I don't think they really understand what the real cost is."