SEC Adopts New Disclosure Rules For Mutual Funds

The second figure, SEC says, is intended to provide investors with a basis for comparing the level of current period expenses of different funds.

The new disclosure was strongly supported by the Investment Company Institute, which said that of all the recent reform initiatives proposed or adopted by the SEC, this one will be the most visible and useful to fund investors.

“Every 6 months, fund shareholders will receive an understandable analysis of their funds annual fees and expenses,” says ICI President Matthew P. Fink.

“Much like the unit price label for groceries at the supermarket, the new disclosures provide an investor-friendly way to compare and understand the impact of mutual fund fees on specific investments on an ongoing basis,” he says.

In addition to expense disclosure, funds will have to file their complete portfolio holdings schedules with the SEC on a quarterly basis. This information will be available to the public through the SECs Electronic Data Gathering, Analysis and Retrieval System (EDGAR).

SEC says this will enable interested investors to monitor whether, and how, funds are complying with their stated investment objectives.

Reproduced from National Underwriter Life & Health/Financial Services Edition, February 13, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.