The Securities and Exchange Commission is proposing a rule aimed at combating misleading mutual fund advertisements.
The proposed rule would allow mutual funds to include more timely information in their advertisements than what is normally presented in a funds prospectus.
But at the same time, the SEC is proposing to reinforce antifraud protections by holding funds responsible for material misstatements or omissions appearing in these advertisements.
Comments on the proposed rule must be filed with the SEC by July 31, 2002.
Carl Wilkerson, chief counsel for securities with the American Council of Life Insurers, Washington, says that ACLI will be scheduling a meeting of its Securities Committee to evaluate what comments, if any, ACLI should offer on the SECs proposed changes.
He adds that the quality and freshness of information is always important for consumers to be able to make informed purchasing decisions.
In its notice of proposed rulemaking, SEC notes that current restrictions on advertising cause special problems.