January 11, 1990
TO: BOARD OF GOVERNORS NO. 4-90
SEC RULES MEMBERS NO. 3-90
RE: STAFF RESPONSE TO INSTITUTE LETTER ON PROSPECTUS LENGTH
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The Institute recently submitted a letter to the staff
expressing our concern about "disclosure creep," i.e., the
increasing number of disclosure requirements being added to the
fund's prospectus by the Commission and the staff and the
consequential increased length of fund prospectuses. ( See
Memorandum to Board of Governors No. 78-89 and SEC Rules Members
No. 74-89, dated December 27, 1989.) Attached is a copy of the
staff's response to our letter.
While the staff does not necessarily share our concern
about the increasing length of fund prospectuses, they do agree
that additional disclosure requirements should be considered in
light of the size and comprehensibility of the prospectus as a
whole. In addition, Kathryn McGrath stated in her letter that
the primary responsibility of the length and readability of the
prospectus rests with the registrant and its counsel. In this
respect, she suggested that funds review their prospectuses to
identify areas in which disclosure may be deleted or reduced such
as disclosure regarding repurchase agreements, options and
futures transactions and arrangements raising potential Glass-
Steagall issues.
Amy B. Rosenblum
Assistant General Counsel
Attachment