May 11, 1994
TO: RESEARCH COMMITTEE NO. 14-94
SEC RULES COMMITTEE NO. 53-94
RE: NASAA FORMS DISCLOSURE REFORM COMMITTEE
__________________________________________________________
The North American Securities Administrators Association
(NASAA) recently formed a Disclosure Reform Committee to develop
recommendations to improve existing disclosure requirements and
practices in the securities industry, including the mutual fund
industry. The Committee anticipates issuing a report within a
year. The Institute will be serving on an Advisory Committee
that will assist the Committee in its efforts.
Among other things, the Disclosure Reform Committee intends
to (1) consider ways to simplify prospectuses to enhance investor
understanding, (2) determine whether there is a need to deliver
the prospectus to investors at the time of their investment,
rather than with the confirmation statement, and (3) explore
whether confirmation statements should include additional
information about fees and/or a statement that the investment has
been approved for either conservative or speculative investors.
The Committee has requested the Institute's assistance in
obtaining information about efforts that have already been
undertaken to improve the readability of prospectuses and the
identification of any experts and other resources that may be
useful in this regard. Attached is a draft agenda for the
Committee's first meeting that identifies with greater
specificity the information it is interested in obtaining.
If you or anyone within your firm has any information or
recommendations that would be useful to the Disclosure Reform
Committee in their work on this important project, please provide
them to me by Friday, May 20, 1994. Any information you provide
to us will be kept confidential upon request. My direct number
is 202/326-5821 and the fax number is 202/326-5828.
Patricia Louie
Associate Counsel
Attachment