SEC Seeks Views From Investors on Proposals to Improve Mutual Fund Disclosure

Under the proposals, every mutual fund prospectus would include a summary section, consisting of the following key information about the fund:

• investment objectives; 
   
• costs; 
   
• principal investment strategies, risks, and performance; 
   
• top ten portfolio holdings; 
   
• identity of investment advisers and portfolio managers; 
   
• brief purchase, sale, and tax information; and 
   
• information about broker compensation and conflicts.

It is the Commission’s intent that this information would be presented in three or four pages at the front of the prospectus.

The Commission is also proposing to permit mutual funds to send or give you the summary information while providing the prospectus online and, upon your request, sending you a paper copy of the prospectus.  The proposal is intended to provide you with key information that is easier to use while using the power of the Internet to make the more detailed information in the prospectus available to you at all times.  You would still be able to get the prospectus in paper by asking for it.

The Commission wants to know your views on the proposals.  In addition, the Commission wants to know your views regarding the mutual fund prospectuses that you currently receive.

• What improvements would you suggest that would make it easier to read and understand mutual fund prospectuses? 
   
• Would you find it useful to receive a short summary of the key information in a mutual fund prospectus, with the more detailed information readily available to you online and sent to you upon your request? 
   
• Is the information that we propose to include in the summary section of the prospectus the information that you need to make an informed investment decision? 
   
• If not, what information would you like to see in the summary?

How Investors Can Submit Comments

Comments may be submitted by any of the following methods:

Electronic comments:

• Use the Commission’s Internet comment form by clicking here; 
   
• Send an e-mail to rule-comments@sec.gov.  Please include File Number S7-28-07 on the subject line; or 
   
• Use the Federal eRulemaking Portal (http://www.regulations.gov).  Follow the instructions for submitting comments.

Paper comments:

• Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. 

All submissions should refer to File Number S7-28-07. This file number should be included on the subject line if e-mail is used.  To help us process and review your comments more efficiently, please use only one method.

The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.govs/comments/s7-28-07/s72807.shtml).  Comments are also available for public inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE, Washington, DC 20549, on official business days between the hours of 10:00 am and 3:00 pm.  All comments received will be posted without change; we do not edit personal identifying information from submissions.  You should submit only information that you wish to make available publicly.

Public comments on these proposed rule changes should be received by the Commission on or before February 28, 2008.

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The full text of the detailed release concerning these proposed rule changes has been posted to the SEC Web site.

http://www.sec.gov/investor/enhanceddisclosure.htm