SEC Seeks Comment on Improved Disclosure of Fund Costs

The SEC issued a release requesting public comment on various issues related to the disclosure of mutual fund transaction costs. Specifically, the SEC seeks comment on whether mutual funds should be required to (a) quantify some or all transaction costs, and disclose them separately or in their expense ratios; (b) provide other quantitative information or narrative disclosure indicative of the level of fund transaction costs; or (c) undertake some combination of the foregoing. In addition, the SEC requests comment on whether mutual funds should be required to record transaction costs or the portion of those costs that represent soft dollar benefits as an expense in their financial statements. The release also seeks comment on the adequacy of existing requirements for board review of transaction costs. Comments must be received by February 23, 2004.