Retail Investors May Soon Have ‘Rich New Source of Investing Information’
Washington, D.C., Aug. 21, 2007 – LAWFUEL – The Legal Newswire – Securities and Exchange Commission Chairman Christopher Cox today announced that several mutual funds have begun providing risk/return information using interactive data, a significant step in the Commission’s ongoing efforts to make financial data more useful and understandable for investors.
“Millions of retail investors rely on mutual funds to finance their retirement, health care, education, and other financial needs, so shopping for the right fund shouldn’t be a needlessly time-consuming and frustrating exercise,” said Chairman Cox. “When most mutual funds provide their risk/return summary information using dynamic data that’s searchable and comparable on the Web, investors will be able to comparison shop among thousands of funds at the click of a mouse. This is a potentially rich new source of investing information for retail investors who need it most.”
“We commend the mutual funds that have demonstrated their commitment to investors by leading the way to interactive data,” Chairman Cox added.
The Commission voted unanimously on June 20, 2007, to adopt final rule amendments that enable mutual funds to submit risk/return summary information from their prospectuses using interactive data. The risk/return summary at the front of every mutual fund prospectus includes information about a fund’s investment objectives and strategies, risks, costs, and historical performance.
All of the new, interactive mutual fund data will be made available to the public on the SEC’s online database, named EDGAR, and to subscribers of EDGAR’s high-speed data dissemination service. The Commission will monitor how the data can be used to help inform mutual fund investors and will consider whether further steps are necessary to increase accessibility.
Interactive data is powered by XBRL, a computer software language that labels companies’ financial and other data with codes from standard lists so that investors and analysts can more easily locate and analyze desired information. The SEC commenced its XBRL Voluntary Financial Reporting Program in April 2005, allowing public companies to voluntarily submit interactive data documents as exhibits to periodic reports and other filings.
Among the first mutual fund filers to participate in the expanded voluntary program are the Allegiant Advantage Fund, American Funds’ Europacific Growth Fund, Muhlenkamp Fund, and Vanguard 500 Index Fund. The SEC encourages additional filers to participate.