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SEC Proposes to Amend Mutual Fund Disclosure Requirements

November 16, 2007

By The Investment Management Practice Group

The Securities and Exchange Commission has proposed new disclosure requirements for mutual funds, which could have far-reaching consequences in the way information is provided to fund investors. In a two-part proposal, which reflects a new layered approach to conveying fund information, the SEC proposed the adoption of a new summary prospectus to be delivered to fund investors in connection with the sale or confirmation of the sale of mutual fund shares. In conjunction with the use of a summary prospectus, a fund would be required to maintain on its website its full statutory prospectus, which must meet certain presentation requirements and be readily accessible to fund investors. An investor seeking more information than that contained in the summary prospectus would be able to obtain it on the funds website (or by requesting a hard copy of the full prospectus).

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