US SEC adds mutual funds to new data format
WASHINGTON, June 20 (Reuters) - The U.S. Securities and Exchange Commission voted on Wednesday to allow mutual funds to submit data on their risks and returns in a new, interactive electronic format.
The investor protection agency unanimously approved adding mutual funds to a pilot program in which a group of about 40 publicly traded companies are voluntarily filing their financial statements in machine-readable computer language known as XBRL.
SEC Chairman Christopher Cox has made it a top priority for the agency to transform its database of static electronic filings into an interactive database rich with raw data using XBRL, or extensible business reporting language.
"Investors today are inundated with information in a form that, being charitable, is difficult to find and understand," Cox said at the open meeting.
Mutual fund information is particularly important because about half of all American households today invest in mutual funds, he said.
Once XBRL data is widely available for mutual funds, investors would be able to use a simple software tool to analyze key points such as the comparative cost of two funds.
The commission has not said when it might make the pilot program for public companies and mutual funds mandatory.
Under the mutual fund pilot program, funds will be able to submit as exhibits to their registration statements electronically tagged information from the risk and return section of their prospectuses. That section includes investment objectives and strategies, risks and costs.
The tagged data will be supplemental and would not replace the official required version required on funds' Form N-1A registration documents.
Democratic Commissioners Annette Nazareth and Roel Campos pushed at the meeting for even more reform of mutual fund disclosure, saying they hoped the commission would quickly take other actions to improve transparency.
"Among other initiatives I hope the commission will soon consider (is) a short-form prospectus proposal that will lay out for fund investors in one or two pages the most critical points of investment-related information," Campos said.
Nazareth said she hoped the SEC would consider requiring broker dealers to provide to investors a streamlined prospectus to investors at the point of sale, which she said is the most critical disclosure time.
