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1396SEC Guidance on Mutual Fund Disclosure

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  • Baker, John
    Jun 27, 2014
      The Securities and Exchange Commission's Division of Investment Management has issued guidance on the SEC's mutual fund disclosure amendments adopted in 2009. IM Guidance Update 2014-08 (June 2014). The guidance notes that mutual funds often provide clear and concise disclosure in response to the Summary Section requirements of Form N-1A, but there are a significant number of prospectuses in which disclosure remains complex, technical and duplicative. Problems noted include the use of long, dense and complex Summary Sections; duplications of disclosures in the Summary Section and the body of the prospectus; the failure to use plain English in the Summary Section; the inclusion of information in the Summary Section that is neither required nor permitted by Form N-1A; and the inappropriate use of cross-references. While most of the guidance is devoted to the Summary Section requirements, it also notes that funds that include strategies and risks that are not principal in the full prospectus should clearly indicate which of the strategies and risks are principal and which are not principal. The guidance is available online at


      John M. Baker, Esquire
      Stradley Ronon Stevens & Young, LLP
      1250 Connecticut Avenue, N.W., Suite 500
      Washington, DC 20036-2652
      p: 202.419.8413
      f: 202.822.0140
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