July 2, 1990
TO: BOARD OF GOVERNORS NO. 47-90
SEC RULES MEMBERS NO. 47-90
PROSPECTUS REFORM AD HOC COMMITTEE
RE: INSTITUTE LETTER TO SEC STAFF CONCERNING PROSPECTUS REFORM
__________________________________________________________
As you know, the Institute has expressed its concern to the
SEC and the staff of the Division of Investment Management about
"disclosure creep" and the resultant increased length of
prospectuses. (See Memorandum to Board of Governors No. 78-89
and SEC Rules Members No. 74-89, dated January 11, 1990.) In
response, the staff recommended that registrants review their
prospectuses to identify specific areas of disclosure that could
be deleted, reduced or redistributed between the prospectus and
the Statement of Additional Information.
Attached is a letter submitted by the Institute to the
staff recommending specific areas of prospectus disclosure that
should be reduced, eliminated or moved to the SAI. The letter,
which was prepared with the assistance of the Institute's
Prospectus Reform Ad Hoc Committee, recommends that the following
areas of disclosure be streamlined: disclosure of yield and total
return calculations, foreign securities, investment in securities
which will not constitute the portfolio emphasis, additional fee
table items, shareholder voting rights, exchange offers and
telephone redemption.
We will keep you informed of developments on this matter.
Amy B. Rosenblum
Assistant General Counsel
Attachment