SEC Expands Fund Disclosure Requirements

The second figure will give investors a basis for comparing the level of current period expenses of different funds, the SEC says.

The new disclosure rule was strongly supported by the Investment Company Institute, Washington, which said that of all the recent reform initiatives proposed or adopted by the SEC, this one will be the most visible and useful to fund investors.

“Every 6 months, fund shareholders will receive an understandable analysis of their fund’s annual fees and expenses,” ICI President Matthew Fink says. “Much like the unit price label for groceries at the supermarket, the new disclosures provide an investor-friendly way to compare and understand the impact of mutual fund fees on specific investments on an ongoing basis.”

In addition to expense disclosure, funds will have to file their complete portfolio holdings schedules with the SEC on a quarterly basis. This information will be available to the public through the SEC’s Electronic Data Gathering, Analysis and Retrieval System.

SEC says this will help interested investors monitor whether, and how, funds are complying with their stated investment objectives.