7.31.2008 On November 21, 2007, the SEC proposed amendments to the disclosure rules and forms under the Securities Act of 1933 (1933 Act) and Investment Company Act of 1940 (1940 Act) that would, if adopted, require key information to appear in plain English in a standardized order at the front of the mutual fund prospectus. In addition, the proposed amendments would permit a mutual fund issuer or broker-dealer to satisfy its mutual fund prospectus delivery obligations under Section 5(b)(2) of the 1933 Act by sending or giving the key information directly to investors in the form of a summary prospectus and providing the statutory prospectus on an Internet Web site. The comment period for the proposed amendments initially closed on February 28, 2008.
After proposing the amendments, the SEC engaged a consultant to conduct focus group interviews and a telephone survey concerning investors’ views and opinions about various disclosure documents filed by companies, including mutual funds. During this process, investors participating in focus groups were asked questions about, among other things, a hypothetical summary prospectus and mutual fund prospectuses.
The SEC has posted the following documents on its website relating to the consultant’s report:
- the consultant’s report concerning focus group testing of the hypothetical summary prospectus and related disclosures;
- transcripts of focus groups relating to the hypothetical summary prospectus and related disclosures;
- disclosure examples used in these focus groups; and
- an excerpt from the consultant’s report concerning the telephone survey of individual investors.
The SEC has invited the public to comment on these materials. Comments are due by August 29, 2008.
Please click http://www.sec.gov/rules/proposed/2008/33-8949.pdf for a copy of the release.