The Investment Company Institute (ICI) supports the SEC's proposed new prospectus delivery option for mutual funds. The SEC proposed rules in November 2007 that would permit mutual funds to provide investors with a summary of key information (a "Summary Prospectus"), and make additional information, including the statutory prospectus, available on the Internet and in paper or by email upon request.

The ICI letter had four general types of comments:

  • Quarterly Updating. The ICI opposes the requirement that the Summary Prospectus contain average annual total returns and yield (if applicable) as of the most recent calendar quarter, as well as quarterly updated top ten portfolio holdings information. It believes that quarterly updating is unnecessary, offers possibilities for investor confusion, and creates substantial operational burdens and costs, as well as compliance, legal, and interpretive questions that, taken together, will deter the majority of funds from adopting the Summary Prospectus. The ICI instead recommends that the required legend in the Summary Prospectus direct shareholders to a specified Web site for updated information.
  • Liability and Compliance. While supporting the proposed rule's provisions that protect mutual funds from the threat of new or additional legal liability, the ICI letter offers suggestions on how to improve these provisions.
  • Technology Requirements. The ICI strongly supports the rule's proposed framework for requiring the statutory prospectus, statement of additional information, and shareholder reports to be made available on the Internet and on paper or by email upon request. The letter sets forth a number of recommendations on how the SEC can further use technology to achieve its disclosure goals.
  • Format, Order and Content. The ICI letter suggests a number of modifications to the format, order and content of the Summary Prospectus, designated to improve the overall quality and utility of the Summary Prospectus.

Please click for a copy of the comment letter.