[9999]
June 9, 1998
TO: ACCOUNTING/TREASURERS COMMITTEE No. 24-98
RE: DRAFT LETTER TO SEC ON IMPROVING SHAREHOLDER REPORTS
______________________________________________________________________________
Attached and summarized below is a draft of a letter from the Institute to Barry Barbash
of the SEC’s Division of Investment Management suggesting certain changes to the forms of
annual and semi-annual reports. This letter is based on discussions with members of the
Shareholder Reports Task Force at its April 22, 1998 meeting.
The letter contains four principal recommendations. First, it recommends that the
current requirement to list in shareholder reports all portfolio investments held as of the last day
of the reporting period be replaced with the option to list only the a fund’s top 50 holdings.
Second, the letter recommends that shareholder reports include a graphic presentation of a
fund’s portfolio investments, such as a pie chart showing the different categories of securities
held in a fund’s portfolio. Third, the letter recommends that the Management’s Discussion of
Fund Performance be required to be included in a fund’s annual report, regardless of whether it
is also in the fund’s prospectus. Fourth, the letter recommends that the financial highlights table
be deleted from both the prospectus and shareholder reports.
If you have any comments on the draft letter, please contact either Joe Savage
(telephone: 202/326-5819, fax: 202/326-5839, or e-mail: savage@ici.org) or Greg Smith
(telephone: 202/326-5851 or e-mail: smith@ici.org) no later than Tuesday, June 26. This draft
letter is also being sent to the Institute’s SEC Rules Committee.
Joseph P. Savage
Assistant Counsel
Attachment