The Private Client Legal Committee of SIFMA provides comments to the Securities and Exchange Commission (SEC) on the SEC's study regarding financial literacy among investors.
SIFMA and its members have worked for many years to increase investors’ understanding of finance, investments and the markets through various financial literacy and investor education initiatives. Much of this important work is performed by the SIFMA Foundation.
Section 917 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires the SEC to conduct a study of financial literacy among investors. As the SEC moves forward, SIFMA strongly urges the SEC to recognise that more disclosure is not better disclosure.
SIFMA offers detailed recommendations, including that the SEC study should focus on several key aspects of financial disclosure that are critical to whether such disclosure is effective. In particular, the study should consider the ways investors use and access information from their service providers, particularly in light of technological advances that should be harnessed to improve delivery of information to investors. The study should also consider the benefits of clear disclosure standards and guidelines to ensure that investors receive the types of information, including about fees, conflicts of interest and other key topics, at the time that information is most relevant to them in making decisions about financial products and services. In developing these standards, the study should balance the need for investors to receive timely, pertinent information with the additional costs to financial service providers and their customers of disclosure requirements that could hamper the service provider’s ability to offer particular products or services.
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