In a speech at the National Press Club in Washington yesterday, Investment Company Institute President Paul Schott Stevens suggested that mutual fund companies should leverage the Internet to help alleviate burdensome new disclosure requirements.
While Stevens said that the Securities and Exchange Commission has been correct in moving carefully toward allowing electronic delivery of disclosure information to shareholders, he also pointed to new ICI research that shows more Americans are becoming increasingly comfortable with using the Internet for financial purposes.
"Nearly 60% of the fund investors who go online use the Internet to obtain investment information," Stevens said. "And our study shows that Internet use has also grown dramatically among all segments of these investors."
Meanwhile, previous research has shown that investors oftentimes get more information than they need.
As such, Stevens said that the time is now for the money management industry and regulators to begin delivering disclosure documents, like lengthy fund prospectuses, to investors electronically.
"The Internet offers the ultimate a la carte menu: those who want more extensive information can get it," he said. "Those who don't can access or be provided the essential information they need, in a form they are likely to use. Thanks to the Internet, we can provide both less and more.
"When it comes to improving fund disclosure, we must harness the tremendous potential of the Internet," he said, adding that his organization, mutual fund companies and regulators should work together to take full advantage of the Internet. "Our investors deserve no less."