December 27, 1989
TO: SEC RULES COMMITTEE NO. 81-89
RE: AD HOC COMMITTEE TO EXAMINE PROSPECTUS DISCLOSURE
REQUIREMENTS
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As you know, the SEC has proposed an amendment to the Form
N-2 requiring disclosure of fund portfolio managers. The
Institute submitted a comment letter generally opposing the
proposal except in certain circumstances. At the recent SEC/ICI
Procedures Conference, Matt Fink, in his introductory remarks,
briefly addressed the portfolio manager proposal specifically but
then expressed a much broader concern which was raised by the
proposal. His concern was over what he termed "disclosure
creep," i.e., the increasing number of disclosure requirements
being added to a fund's prospectus by the Commission and the
staff. Those additional requirements have, in the aggregate,
substantially increased the length of fund prospectuses.
Last Thursday, the SEC approved for public comment
amendments to the Form N-1A which would, among other things,
require disclosure of portfolio managers. (The release proposing
this requirement has not yet been issued.) In view of this
proposal, the Institute submitted the attached letter to Chairman
Breeden reiterating our concern about "disclosure creep" and
proposing a solution to the problem, which would be to adopt an
approach akin to "zero-based budgeting." This approach requires
that every time the Commission or the staff proposes a new
disclosure item, a second proposal also be made to delete or pare
down an existing requirement.
The Institute is forming an ad hoc committee to review
current disclosure requirements and prepare a proposal for the
SEC regarding those requirements which should be deleted or
modified. Please contact me at (202)955-3523 by January 29,
1990, if you are interested in participating on that committee .
Amy B. Rosenblum
Assistant General Counsel
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