Lost amidst all the debate in the industry over whether newly anointed
During his swearing-in late last week, the California Republican said he would indeed make rule enforcement a priority, but also said that it's time to begin printing proxy statements and prospectuses in plain English.
"When a company issues a proxy statement, should the millions of ordinary Americans who own the company's stock be able to read and understand it?" Cox asked, during a speech at the regulator's Washington headquarters. "It is all well and good that their broker's lawyer could understand it. But what about the individual investors themselves - is disclosure for them, too?"
Prospectus overhaul is a contentious issue among fund executives and regulators. At an Investment Company Institute conference earlier this year in Palm Desert, Calif., Kathryn McGrath, a partner a Washington-based
"We need to focus on other things, instead of spending so much time on a document no one cares about," she said.
Paul Roye, a senior vice president at Los Angeles-based
"The average American doesn't want to read the prospectus," added Marianne Smyth, a partner at
Cox, however, praised the efforts of one of his predecessors, Arthur Levitt, a Democrat who tried placed a premium on publishing financial information in plain English.
"Levitt's vision was dead-on," said Cox, who spent 17 years in Congress before joining the SEC. "How hard do you think it would be today to find offensive legalese in almost any mutual fund prospectus?"
Cox also promised that all statements and information from the SEC would be understandable by the everyday American.