U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission

Special Request for Comments from Investors

(Proposed Mutual Fund Disclosure Forms - SEC File No. S7-06-04)

Brokers may have conflicts of interest when they sell mutual funds and other investments. For instance, your broker may get paid more if you purchase one fund over another, or the broker may receive other fees or payments from a fund for selling its shares.

We have proposed two new forms that would require brokers to tell you how much you must pay when you buy a particular fund and how much your broker and the firm will receive for selling that fund. These two forms are designed to provide you with information at two points in time - either orally or in writing immediately before your broker places the order (which is also called the "point-of-sale") and in a written confirmation statement after the transaction occurs. The purpose of the forms is to give you enough information so that you can understand what conflicts your broker and the firm have. That way, when a broker recommends a particular fund, you can assess with full knowledge whether the investment is better for you or for your broker.

We want to know whether the forms clearly communicate the information you need to make your investment decisions. If not, why not? We further want to know whether the forms will provide you with the information you need at the time you need to receive it. If not, when would you want to receive the information? Finally, we would like to know what improvements, if any, you would make to the forms.

Information About Our Rule Proposal



Modified: 01/29/2004