SEC permits mutual funds to use a summary prospectus and updates statutory prospectus requirements
Purpose The purpose of this paper is to examine SEC rule amendments that permit a mutual fund to use a three or four page "summary prospectus" to satisfy statutory prospectus delivery obligations and amendments to a fund's statutory prospectus requirements that require key information in a standardized order at the front of the document.Design/methodology/approach The approach is to explain the SEC's regulatory changes to the basic mutual fund disclosure documents designed to help investors choose among the more than 8,000 mutual funds.Findings The investing public's use of the internet for fund research and fund transactions has made it possible for the SEC to take a "layered" approach to disclosure documents, providing an investor with a short form document and making available more detailed information on fund web sites. The SEC will likely follow suit with other documents and updated compliance requirements.Originality/value The paper will assist fund legal counsel and compliance professional.