Securities and Exchange Commission Modernizes the Delivery of Fund Reports and Seeks Public Feedback on Improving Fund Disclosure

Washington, DC - - (June 5, 2018) - - Today, the U.S. Securities and Exchange Commission published the following information:

Yesterday, the Commission voted to improve the experience of investors who invest in mutual funds, ETFs and other investment funds. In three related releases, the Commission provided a new, optional “notice and access” method for delivering fund shareholder reports, invited investors and others to share their views on improving fund disclosure and sought feedback on the fees that intermediaries charge for delivering fund reports. These actions are part of a long-term project, led by the Division of Investment Management, to explore modernization of the design, delivery and content of fund disclosures for the benefit of investors.

“These actions are an important part of the Commission’s effort to better serve Main Street investors in our ever changing marketplace,” said SEC Chairman Jay Clayton. “The new rule significantly modernizes delivery options for fund information while preserving the right of fund investors to receive information in paper form as they do today. I look forward to public feedback on next steps, and encourage everyone with an interest in fund disclosure—especially Main Street investors—to give us their ideas on how to improve the design, delivery and content of fund disclosures.”

In the first of three releases, the Commission adopted new rule 30e-3. The rule creates an optional “notice and access” method for delivering shareholder reports. Under the rule, a fund may deliver its shareholder reports by making them publicly accessible on a website, free of charge, and sending investors a paper notice of each report’s availability by mail. Investors who prefer to receive the full reports in paper may—at any time—choose that option free of charge. Funds may rely on the new rule beginning no earlier than January 1, 2021.

The Commission is also seeking public comment on additional ways to modernize fund information. Investors, academics, literacy and design experts, market observers, and fund advisers and boards of directors are invited to visit to provide feedback on how to improve the experience of fund investors. This input will help inform the Commission on how to modernize the design, delivery and content of fund information, including how to make better use of 21st century technology to provide more interactive and personalized disclosure.

Finally, the Commission is seeking comment on the framework for certain processing fees that broker-dealers and other intermediaries charge funds for delivering fund shareholder reports and other materials to investors.

The Commission requests that commenters provide feedback on the requests by October 31, 2018.