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SEC Proposes New Layered Prospectus Disclosure and Delivery Regime

By The Investment Management Practice Group

The Securities and Exchange Commission is proposing fundamental changes to mutual fund prospectus disclosure and delivery requirements. In a release issued last week,  the SEC proposed substantial amendments to Form N-1A which would require a new summary section in the very front of fund prospectuses that would contain only certain key information. This key information would also be required to be presented in a standardized order. In addition, the SEC is proposing rule amendments that would provide funds with the ability to effect sales of shares off of a new summary prospectus (identical to the new summary section of the prospectus), provided that the full statutory prospectus is available on an Internet web site.