The mutual fund industry is willing to cooperate with the Securities and Exchange Commission and the Financial Industry Regulatory Authority on point-of-sale disclosures to investors, as President Obama has proposed, said Investment Company Institute President Paul Schott Stevens.
However, if disclosure warnings are only made on mutual funds, it would be akin to putting a skull and crossbones warning on mutual funds, Stevens told Dow Jones. We will strongly be opposed to singling out mutual funds among all financial products.
The Obama administration is also calling for summary prospectuses at point of sale, and its financial overhaul white paper singles out mutual funds, Stevens noted.
SEC Chairman Mary Schapiro said that giving investors a prospectus at the time of confirmation is too late for them to pay attention to the documents. She said she liked the idea of focusing on the point of sale, which the SEC has considered in prior years but has dropped. Wed love to have the flexibility to require earlier delivery of information to investors at the point of sale, she said.
In regards to new regulations for money funds, Stevens reiterated the industry will vigorously oppose a floating NAV, calling a $1 NAV the bedrock of money market funds.
If you float the net asset value, virtually everyone in our industry believes these products will go away, he said.