SEC Requires Interactive Data Disclosure for Funds’ Risk/Return Summaries

A recent Securities and Exchange Commission (SEC) Release requires all mutual funds to submit their Risk/Reward Summary sections in interactive data format, as of January 1, 2011. Funds may be subject to severe penalties for noncompliance.

The primary purpose of the new rule is to enhance the ability of investors, analysts, and regulators to search and compare mutual fund data. The new interactive data format will not result in a change in the scope of fund disclosures, nor will it replace traditional, text-based filing formats. If desired, funds can utilize the interactive data filing format as early as June 15, 2009, the effective date of the SEC rule.

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