The SEC published a prototype ‘summary prospectus’ for mutual funds. The proposed streamlined prospectus would let investors quickly learn key information about a mutual fund. The Commission voted unanimously on November 15 to propose rule amendments that would enable investors to view a concise, plain English summary of key facts about a mutual fund.
“In three or four pages, an investor could get the important facts about a mutual fund in a quick and convenient way," said SEC Chairman Christopher Cox. "Instead of digging through pages of legalese, investors would be able to spend more time learning how their money is invested and making informed investment decisions."
The Commission is proposing that the following information be included in a mutual fund summary prospectus:
- investment objectives
- costs
- principal investment strategies, risks, and performance
- top 10 portfolio holdings
- identity of investment advisers and portfolio managers
- brief purchase, sale, and tax information
- information about broker compensation and conflicts
Deadline for comments is 28 February 2008.
SEC Press release
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© Graham Bishop
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