NEW SUMMARY PROSPECTUS REQUIRED BY 2010
The SEC voted to require mutual funds to deliver a summary prospectus to investors. The summary prospectus will contain summary information about the fund’s investment objectives and strategies, costs, risks, adviser, portfolio manager, purchase and sale procedures, tax consequences, and intermediary compensation. A fund sponsor can deliver the summary instead of the full prospectus so long as the full prospectus is available on-line and an investor can obtain a paper copy upon request. Funds must begin complying on January 1, 2010.
OUR TAKE: Firms should begin the process of integrating their service providers and technologies to create and deliver the new document and the on-line full disclosure. The last revamp of the disclosure rule took a lot of time and cost a lot of money. We expect these changes will also involve the spending of significant resources.