SEC Proposes To Modernize Fund Communications

On August 5, 2020, the Securities and Exchange Commission (SEC) proposed amendments to the disclosure framework for mutual funds and exchange-traded funds (ETFs) and to the advertising rules applicable to investment companies more broadly.¹ The proposed amendments would:

• permit funds to replace the annual prospectus update delivery requirement with a layered disclosure framework, under which fund investors would receive notices of material changes to the fund as they occur, and streamlined shareholder reports highlighting certain key fund statistics and changes;
• continue to make the fund's prospectus, and information that is currently required in shareholder reports but may be less relevant to retail investors, available online and for delivery upon request;