SEC Readying Fund Data-Tagging Rule

The Securities and Exchange Commission is putting the finishing touches on a rule that would allow fund companies to submit forms to it containing tags on funds’ risk and return information, SEC Chairman told attendees at the Investment Company Institute’s 49^th Annual General Membership Meeting Thursday.

The data would become interactive through the use of eXtensible business reporting language (XBRL) paired with a classification method the ICI has developed.

Cox gave an example of funds organized into drop-down menus. Investors pick the family, then the fund, then the class of shares they are interested in, and add as many as they like with just a few mouse clicks.

Investors then pick what element of the fund is most important to them: expenses, risk/return profile, strategy or objectives. One more mouse click, and a table appears, alongside a bar chart, illustrating the costs and differences between the selected funds.

“The power of this tool is that it draws directly from the source data provided to the SEC,” Cox said.

“In a very short while,” he said, this tool will help investors find interactive data “indispensable.”