Final Fund Disclosure Requirements AdoptedWashington, DC, March 4, 2004 - The SEC recently adopted rule and form amendments requiring registered management investment companies to provide periodic disclosure about their costs, portfolio investments, and past performance. The final rules: - require mutual funds to disclose fund expenses borne by shareholders during the reporting period in reports to shareholders;
- permit a management investment company registered under the Investment Company Act to include a summary portfolio schedule in its reports to shareholders, provided that the complete portfolio schedule is filed with the SEC on Form N-CSR semiannually and is provided to shareholders upon request, free of charge;
- exempt money market funds from including a portfolio schedule in reports to shareholders, provided that this information is filed with the SEC on Form N-CSR and is provided to shareholders upon request, free of charge;
- require reports to shareholders by funds to include a tabular or graphic presentation of a fund's portfolio holdings by identifiable categories;
- require a fund to file its complete portfolio schedule as of the end of its first and third fiscal quarters with the SEC on new Form N-Q, which will be filed under the Investment Company Act and the Exchange Act and certified by the fund's principal executive and financial officers; and
- require a mutual fund to include a Management's Discussion of Fund Performance in its annual report to shareholders.
ICI Position
The Institute expressed strong support for several of the proposed rules, noting that the new disclosure requirements would both significantly improve investor understanding of a fund's transaction costs while simultaneously bolstering investor protection. Related Links
Additional information on prospectus, shareholder report, and portfolio disclosure-related issues is available on this website.
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