Starting tomorrow, in advertisements and sales literature, fund companies must comply with the after-tax performance reporting rules adopted by the SEC in January. The original compliance date, Oct. 1, was pushed back to Dec. 1 at the request of fund companies.
In a letter dated Sept. 20 to Paul Roye, the SECs director of investment management, lawyers from Fidelity, T. Rowe Price, Prudential Financial and Vanguard said the extension was necessary because, "there was a lack of agreement within the industry, as well as with third-party providers, on several key components of the calculation."
Funds that claim to be managed to limit or control the effect of taxes on performance and include performance data and funds that voluntarily include after-tax performance data are affected by the rule. Other funds need not report after-tax performance.
The compliance date for after-tax reporting in prospectuses is Feb. 15, 2002. Any new registrations or annual amendments to prospectuses after that date must be in compliance with the SECs rules.