The Securities and Exchange Commission will vote at its Nov. 19 meeting next week on a provision to allow shortened mutual fund disclosure statements.

The concise, plain-English version of the full prospectus has been met with widespread support from the mutual fund industry, and many experts have predicted the Commission would try to approve the proposal before the end of the year.

SEC Chairman Christopher Cox is expected to retire early next year when the Obama Administration takes over, and many expect this provision to be Cox’s swan song. Cox’s term does not officially end until next June, but he will likely leave before that.


This summary prospectus, which is optional, could save the industry hundreds of millions of dollars in printing and postage fees, not to mention millions of trees, according to a Forrester Research study.

"With the advent of the SEC's summary prospectus rule, firms can better meet the needs of their customers by delivering prospectuses in the form and length they desire and more importantly realize even greater cost savings by shifting to a digital, print on-demand model," said Russell Planitzer, NewRiver's president and CEO.

In place of the full prospectus, firms can choose to mail investors a brief one- to four-page summary of the longer prospectus that contains key facts—such as the fund's investment objectives, fees, risks, and performance—written in plain English.

"Like the risk/return summary that is already required at the front of every mutual fund prospectus, this summary would include a fund's investment objectives and its strategies, risks, and costs," Cox said earlier this year. "It also would include brief information regarding top 10 portfolio holdings, investment advisers and portfolio managers, purchase and sale procedures and tax consequences, and how the people who sell the fund are paid."

The short prospectus would refer investors to the long version, available on the web, or by mail upon request. The web version will use layered disclosure and "deep linking" to allow investors to get more specific information by clicking on certain links, said Len Driscoll, VP of product marketing at NewRiver.

Next week’s open meeting begins at 10 a.m.

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