January 19, 1995
TO: SEC RULES COMMITTEE No. 8-95
RE: IMPROVING THE SEC’S DISCLOSURE REVIEW PROCESS
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In a recent speech focusing on the readability of mutual fund prospectuses, SEC
Chairman Levitt acknowledged that the SEC staff is partly to blame for any lack of clarity in
prospectuses. To remedy this, he stated that the Division of Investment Management had
formed a task force to study ways to improve the disclosure review process. This task force
also was mentioned by Investment Management Division Director Barry Barbash in his
opening remarks at the Institute’s Procedures Conference in December. In describing the task
force and its objectives, Mr. Barbash specifically stated that the staff is interested in industry
input.
Yesterday, we received the attached letter from C. Gladwyn Goins, Associate Director of
the Division, describing the goals of that task force and the approach it will take. Specifically,
the letter states that the task force will undertake a review of (1) the procedural process and (2)
the substantive comments given to registrants. In addition, the staff intends to review the
allocation of disclosure between the prospectus and the SAI. The letter requests the industry’s
comments on this matter.
Over the years, we have heard many complaints from members about the disclosure
review process. Therefore, we are pleased that the staff has undertaken a review of the process
and, in particular, that they have sought our input on this project.
We view this as a rare opportunity to provide the staff with constructive
recommendations for improving the process. Because there is every indication that
Chairman Levitt and the Division are serious about improving the process, we urge you to
give this your attention and serious consideration. Please provide Amy Lancellotta (202/326-
5824) with your views on this matter generally and any specific recommendations you may
have by February 8, 1995.
Paul Schott Stevens
General Counsel
Attachment