SEC Proposes Modernized Fund Reports And Disclosure Amendments

On August 5, 2020, the SEC unanimously proposed rule and form amendments intended to modernize the disclosure framework for mutual funds and ETFs (the "Proposals"). This Alert summarizes the key provisions of the Proposals.

Executive Summary

The Proposals, if adopted, would modify the disclosure framework for funds registered on Form N-1A (mutual funds and ETFs) to follow a "layered" approach to fund disclosure that highlights key information for retail investors.

• For existing shareholders, the Proposals would make streamlined (3-4 page) annual and semi-annual shareholder reports the primary source of fund disclosure.¹ Certain information now required in a fund's shareholder reports, such as the fund's financial statements, would no longer appear in these reports. Instead, this information would be made available online and delivered free of charge upon request, and filed with the SEC on a semi-annual basis on Form N-CSR.