The Investment Company Institute is urging regulators to designate the Internet as the primary medium for point of sale disclosure of the costs and conflicts of interest associated with broker-sold mutual funds.
In a comment letter to the Securities and Exchange Commission, ICI President Paul Schott Stevens said, "The Internet is the best way to provide investors with timely and convenient access to the required information."
Stevens said the Internet "will help ensure that the new requirements do not have the undesirable effect of creating a burdensome disincentive for brokers to sell mutual funds, as compared to other products that are not subject to similar requirements."
The ICI also recommended that the SEC refrain from expanding the scope of the proposal beyond broker costs and conflicts. Rather, it believes that the Commission staff should conduct a soup-to-nuts reexamination of the mutual fund disclosure framework as a separate initiative.
Further, the ICI suggested that the SEC make certain exceptions to the point of sale requirements including one that precludes funds sold directly to investors because they do not carry the conflicts of interest the rule is designed to address.
In the interest of fairness, the ICI also urged the SEC to extend the point of sale disclosure requirements to other investment products brokers sell and work with other regulators to extend similar provisions to other distribution channels.