WASHINGTON D.C. - The SEC last week adopted an amendment to so-called householder rules that allow fund companies to issue one set of documents per household.

The householder rule is the first of several disclosure-related issues the commission hopes to make final decisions about in the near future, said Paul F. Roye, director of the SEC's division of investment management. Roye discussed the SEC's future rulemaking plans at a conference on investment management regulation here late last month sponsored by the American Legal Institute and American Bar Association.

The SEC amendment to document disclosure rules in the Securities Exchange Act of 1934, allows fund companies, broker-dealers and banks to issue one proxy statement to two or more shareholders residing in the same household.

The householding rule amendment will reduce the amount of duplicate information that shareholders receive and will lower printing and mailing costs for companies, according to the SEC. The amendment also affects the rules for householding annual reports, allowing a single annual report to be sent to shareholders sharing the same address.

After-tax disclosure of fund performance is another of the issues the SEC hopes soon to resolve. The commission wants to issue regulations on after-tax disclosure before Congress passes legislation requiring it, Roye said.

"We are very close to making a recommendation to the commission on a final rule proposal," he said. The commission is currently examining the comments it has received on the matter and is studying how it can incorporate some suggestions into the final proposal, Roye said.

One of the suggestions the SEC is examining is requiring that the after-tax returns funds disclose be based on the tax brackets of the average investor, he said. The SEC had proposed that the disclosure be based on the highest tax bracket.

"Something like that is desirable," Roye said. "But the problem is I don't want to see us get into a situation where we publish a number every year when the tax law changes."

The SEC is also close to completing proposals on two proposals that would give investors greater information on fund directors, Roye said. The SEC has taken hundreds of comments into consideration in developing the final rules, he said. One of the proposals would require fund directors to report personal information about their extended family members' business relationships. Many comments in response to the proposal objected that it required too much information. The commission will consider modifying the final proposal to reflect those concerns, Roye said.

In the next few months, the SEC will also issue a final rule that will require fund directors to disclose their holdings in a fund complex, Roye said.

"We got comments along the lines that maybe it would be sufficient to allow directors to make the disclosure in terms of range of dollars that they own in individual funds," he said. "Our goal in advancing that proposal was to give investors some indication whether directors have a stake in the fund, though we are carefully considering those comments and may recommend some modifications along those lines."

The SEC is also focusing on improving shareholder reports in order to make it easier for investors to understand what their fund managers are doing, Roye said. The SEC is considering requiring funds to include the management discussion and analysis section that are included in prospectuses, in shareholder reports, he said.

The SEC is also considering how it should regulate new web-based products as well as exchange-traded funds, he said. As exchange-traded funds evolve, the SEC, "will have to proceed carefully to make sure those products work," Roye said.

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