ICI Strongly Supports Proposal Allowing Use of Internet to Deliver Proxy Materials, February 2006

Washington, DC, February 15, 2006 - The Institute strongly supports an SEC proposal that would permit issuers, including investment companies, to make greater use of the Internet to furnish proxy materials to shareholders.

Background
In December 2005, the SEC proposed amendments to the proxy rules under the Securities Exchange Act of 1934 that would permit issuers to furnish proxy materials to shareholders electronically through a "notice and access" model. Under the Commission's proposal, issuers choosing to rely on the proposed "notice and access" model would have to send a Notice of Internet Availability of Proxy Materials to shareholders and post the proxy materials on a publicly accessible website on or before the time that shareholders receive the notice. The proxy materials would have to remain accessible on the website free of charge through the time of the shareholder meeting to which the proxy materials relate.

ICI Position
In a February 13 comment letter, the Institute observed that the Internet provides a unique tool for improving the quality of mutual fund disclosure while meeting a variety of investor needs and preferences for different levels of information. ICI described the results of a recent Institute study finding that nearly 90 percent of fund investors have access to the Internet, and. urged the SEC to pursue Chairman Christopher Cox's goal of using technology to improve disclosure as part of a top-to-bottom review of the mutual fund disclosure regime.

the SEC permit the use of the "notice and access" model for proxy materials for business combinations and for investment company shareholder reports;
issuers be permitted to include in or with the notice impartial explanatory information designed to help shareholders understand the significance of the proxy solicitation and to anticipate general questions shareholders may have about the proxy proposals and voting mechanics; and
eligibility standards be established for shareholders to conduct electronic-only solicitations and requiring them to send a notice to the holders of a majority of the investment company's voting securities.

Related Links
In addition to the links below, a section of this website is devoted to fund disclosure issues.