SEC Okays Summary Prospectus

The Securities and Exchange Commission has put off until December 3 a vote on adopting rules that would curtail conflicts of interest among credit ratings agencies. The rule on credit ratings agencies was pulled from the SEC’s November 19 open meeting agenda. However, at the meeting the SEC did approve its summary mutual fund prospectus.

In explaining why a vote on the credit ratings rule was postponed, SEC Chairman Christopher Cox said the Commission originally “had planned to spread the consideration of the credit rating agency rules over two meetings, since that is the way we proposed them, but the Commissioners and the staff have agreed that the best way to proceed is to do the entire package of rules in one meeting.” The SEC, he said, “will return to vote on those rules in exactly two weeks. This rulemaking remains a high priority for the Commission.”

The new summary prospectus requires that funds provide investors with a concise summary–in plain English–of the key information they need to make informed investment decisions. The new summary prospectus will appear at the front of a fund’s prospectus.