February 5, 2008
Gentlemen:
I would like to comment on the proposed rule to provide a short form of a mutual fund prospectus to investors.
A short and standardized form is sorely needed for many reasons. First and foremost, in our zeal to provide full disclosure, we have created a legalistic monster that very very few investors will read, much less comprehend. Plus the current record keeping requirements at my level are creating an additional paperwork blizzard with the full length prospectus.
I believe it could be shortened to as little as two pages if one simple thing was done. This would be to require a statement of "Investment Objective and Investment Strategy" to be non-deviational in nature. For example I was once told by a mutual fund wholesaler that they were bringing out a fund that only invested in the bluest of blue chip companies. When I reveiwed the prospectus, I found that, in fact,they could just about do anything they wished.We definitely need some relief in this area because the current situation is simply not providing the information that investors need to make reasonable investment decisions in a form that they are willing to take the time to consider.
Sincerely,
Kenneth L. Kesler