Federal regulators Wednesday ordered new mutual fund reforms and proposed a ban on hidden brokerage commissions.

The Securities and Exchange Commission held the fourth in a series of open meetings on investor protection initiatives in response to the ongoing fund scandal.

The SEC actions:

<B> * </B>It ordered funds to disclose in dollar terms the amount of fees and expenses that shareholders pay on a $1,000 investment.

<B> * </B>It ordered the companies to publicly update their portfolio holdings quarterly rather than semi-annually.

Investors won’t see the new disclosures until this summer at the earliest because the companies need time to implement them.

<B> * </B>It proposed banning the so-called directed brokerage payments that are part of 12b-1 marketing and distribution fees. Under these arrangements, fund companies agree to steer trades to brokerage houses if the brokers agree to promote the funds to investors.

Directed brokerage payments create ”unmanageable conflicts of interest,” said Paul Roye, head of the SEC’s division of investment management. The proposal is open to public comment.

Currently, 12b-1 fees are capped at 1%. Of the 16,190 mutual funds tracked by Morningstar, the research firm, two-thirds charge 12b-1 fees. About 40% have 12b-1 fees higher than 0.25%.

”The commission is deeply committed <B> . . . </B> to try to restore investor confidence in fund investments,” SEC Chairman William Donaldson said.

The mutual fund industry, which manages more than $7 trillion in investor assets, has been tarnished by an onslaught of revelations of fund company misconduct. They first came to light in September when New York Attorney General Eliot Spitzer settled charges with a hedge fund that it engaged in illegal trading practices with several mutual fund firms.

Since then, investor advocates and some members of Congress have criticized the SEC, citing lax enforcement.

The Investment Company Institute, an industry trade group, said it supports the disclosures and the directed brokerage ban.