On October 26th, the SEC adopted important disclosure reforms for the Mutual Fund and ETF industry. The expectation going forward will be that disclosures for Mutual Funds and ETFs will be in an engaging and user-friendly format.
- The SEC is concerned that current disclosures can be incredibly lengthy and overwhelming for investors.
- Under the new reforms, the emphasis will be on summary disclosures that are concise and visually appealing to provide retail investors with the key information required to make investment decisions.
- Full-length disclosures that are the norm today will still need to be readily available upon request but will not be the main source of information for retail investors.
Vigilant’s Final Conclusion
This new reform will have an impact on the method for producing disclosures for Mutual Funds and ETFs. Firms will need to reevaluate the designs of and information within their disclosures.
This may become labor intensive, as collaboration will likely involve the compliance, advertising, and financial reporting departments.
Please reach out to Vigilant with any questions or concerns pertaining to this new reform. We are happy to work alongside your team as adjustments are made to disclosure policies and procedures.