SEC Staff Warns Against "Disclosure Creep"

The staff of the SEC's Division of Investment Management warned against "disclosure creep" invading fund prospectuses in regulatory guidance posted in June 2014.

In reviewing registrant filings, the staff cited a "significant number of prospectuses," which contained disclosure that is "complex, technical and duplicative."  Moreover, it found many Summary Sections to be "unnecessarily long."

The staff guidance breaks no new ground.  Rather, it provides a concise primer of Form N-1A's layered prospectus disclosure requirements.  Among other things, the guidance reminds registrants to:

• Limit the Summary Section to prescribed disclosures
• Avoid unnecessary and confusing cross-references