Regulatory Alerts2020-11-05 | 2020-17449Added
Tailored Shareholder Reports, Treatment of Annual Prospectus Updates for Existing Investors, and Improved Fee and Risk Disclosure for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements
The Securities and Exchange Commission proposes rule amendments to modernize the disclosure framework for mutual funds and exchange-traded funds by introducing concise, visually engaging shareholder reports that highlight key information for retail investors. The proposal eliminates the requirement to deliver annual prospectus updates to existing shareholders, instead relying on tailored shareholder reports as the central disclosure source while making less relevant detailed information available online or upon request. Additionally, the Commission seeks to improve clarity in fund prospectuses regarding fees and principal risks and mandates standardized fee information in investment company advertisements to promote transparency.
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