Mutual fund executives say the Securities and Exchange Commission has not gone far enough to curb problems associated with omnibus accounting.

The SEC did not require full disclosure of the shareholders who trade funds within omnibus accounts, a move that would have allowed firms to properly police themselves for marketing timing and other problems, according to Fund Action, a mutual fund industry newsletter.

Earlier this month, the SEC voted 5-0 to allow mutual funds to voluntarily charge a 2 percent redemption fee on frequent trades to discourage market timing, one of the abuses at the center of the mutual fund industry scandal. Fees would apply to sales of fund shares redeemed within seven days.

"Redemption fees are not really susceptible to a one-size-fits-all approach," said SEC Chairman William Donaldson, according to Bloomberg News. "It makes a great deal of sense to turn to fund boards to analyze these issues on a fund-by-fund basis." If the fund board determines market timing is a problem, the fund can delay or restrict trading activity, redeem shares in kind or investigate.

Fund Action described omnibus accounting as the practice of a fund company receiving aggregated orders to buy or sell shares, with the individual records of shareholders kept at a third party, such as brokers and retirement plan administrators.

Under the rule, mutual funds companies will develop written agreements with intermediaries on handing over shareholder trading information. The data will make it easier for the funds to identify customers who trade through omnibus accounts, but the SEC did not require individual shareholders to be identified to the funds.

Mike Radmer, partner at Dorsey & Whitney in Minneapolis, told Fund Action that the agreements are no substitute for full shareholder accounting. Julian Sluyters, president and CEO of Scudder Group of Funds, told the newsletter that the written agreements between the fund and intermediary will increase transparency, but costs to the shareholder will go up too.

The SEC estimated the cost of setting up systems for intermediaries to do their due diligence at $630 million over three years.