Although it would increase the frequency of disclosure, the proposal is likely to require funds to list just their top 50 holdings, not the entire portfolio as is currently required, Roye said. Investors that want a complete list of a portfolio's holdings would be able to request it, he said. The proposal will also seek to make index funds exempt from the requirement since their holdings are already known to investors, Roye said.
The proposal is further likely to seek to require funds to use plain English in their discussion of performance, he said. The proposal may also seek new presentation standards for fund fees and expenses based on some of the recommendations the SEC made in its study of mutual fund fees, said Roye. The SECs fee study recommended that shareholder reports include the fees and expenses of a $10,000-investment, based on the funds historic performance. The study also recommended that shareholder reports include a figure based on a fixed rate of return to facilitate comparisons of expenses among a variety of funds.