The SEC is considering a rule change that could save mutual funds millions of dollars each year by creating a new, abbreviated mutual fund document that would take the place of lengthy fund prospectuses under some circumstances.

SEC rulemakers are considering a proposal that would allow funds to send shareholders the new document, known as an "annual prospectus update," said Paul Roye, director of the SEC's division of investment management, in a recent speech. Funds could, if they chose, provide the annual prospectus update to shareholders rather than sending a complete prospectus, he said. Shareholders could request a complete prospectus if they wanted one, Roye said.

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