SEC Proposes New Rules on Mutual Fund Information

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WASHINGTON (AP) _ Investors would get more information on their mutual funds under a series of changes the Securities and Exchange Commission proposed Wednesday.

The stock market agency voted to seek public comment on the proposals that would be subject to revision, based on review of the comments the SEC gets, before they can be adopted. The proposals under consideration would: Improve the information given investors about funds with multiple classes of securities that target specific kinds of investors. Update the proxy rules governing information provided investors by a fund's board of directors before voting on issues like fee increases. Extend to tax exempt money market funds the same risk investment limitations imposed three years ago upon taxable funds.

Mutual funds, the professionally managed, pooled investments of many shareholders, have been the fastest growing segment of the retail financial markets with $1.976 trillion invested as of Oct. 31.

The SEC has been upgrading its regulation of the industry since releasing a massive study last year of the 1940 law that governs mutual funds.

The first proposal would allow mutual funds to issue multiple classes of shares without obtaining an exemption from the SEC. But new sales documents and advertising requirements "would help investors decide which investment suits them better by clearly setting out sales and service charge options," said SEC Chairman Arthur Levitt Jr. …