New European Disclosure Initiative Represents an ImprovementWashington, DC, May 22, 2007 - The Institute strongly supports the European Commission's ongoing review of the disclosure that European Union investors receive and its movement toward short, meaningful explanations of the risks and costs associated with investments in European funds. Background
As part of an ongoing investor research program, ICI undertook in 2006 a comprehensive study to identify the information needs of mutual fund investors and the sources from which they obtain that information. The research included several key findings: - Investors consider a wide range of information before purchasing mutual fund shares outside workplace retirement plans.
- Investors consult a variety of sources for fund information before and after purchasing shares, and one of these sources is usually a professional financial adviser.
- Shareholders look for concise investment information and, where possible, graphic presentations, and most shareholders do not consult fund prospectuses because they find them too long and difficult to understand.
- Shareholders embrace the Internet.
ICI Position
Besides supporting the EC proposal to put in place disclosure providing short, meaningful explanations of the risks and costs associated with investments in a UCITS, or Undertakings for Collective Investment in Transferable Securities, fund, ICI supports the adoption of legally binding implementing measures for the revised UCITS Directive to harmonize key investor disclosure requirements across the EU. ICI also urges that the Committee of European Securities Regulators and the EC standardize the methodology for computing fund performance in order to provide comparability of fund advertising and disclosure material. Related Links
This site includes a section devoted to global developments that affect funds and their investors, including disclosure issues.
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