August 19, 1993
TO: MONEY MARKET FUNDS AD HOC COMMITTEE NO. 8-93
PROSPECTUS SIMPLIFICATION TASK FORCE
RE: STREAMLINING MONEY MARKET FUND PROSPECTUSES
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As you may know, SEC Chairman Levitt recently testified at a hearing held
by the House Telecommunications and Finance Subcommittee on the mutual fund
industry. Among other things, he stated that in connection with improving the
readability of mutual fund prospectuses, the Division of Investment Management
is considering streamlining the disclosure requirements for money market fund
prospectuses.
A member of the Division staff confirmed this and informed us that they
believe money market fund prospectuses are currently longer than they need to be.
The staff member admitted that part of the reason is due to staff comments. Some
of the areas that the staff believes could be streamlined include disclosure
about (1) the securities in which the fund may invest, (2) NRSROs and (3) the
regulatory requirements applicable to money market funds (which apparently are
described at length in some prospectuses).
The staff member indicated that the Division is receptive to industry
suggestions on ways to improve money market fund prospectuses. We were advised
that this project is on a fairly fast track. Therefore, please provide me with
your thoughts on this matter by September 10. My direct number is 202/955-3523
and the fax number is 202/659-1519. Please note that I will be out of the office
the week of August 23-27.
Amy B.R. Lancellotta
Associate Counsel