The Wall Street Journal-20080214-SEC Pushes for Online Brochures for Investors

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SEC Pushes for Online Brochures for Investors

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WASHINGTON -- Money managers would have to provide online brochures describing their services, fees, investment performance and potential conflicts of interest under a proposal approved yesterday by the Securities and Exchange Commission.

The SEC voted 3-0 to float long-awaited changes to information provided by investment advisers to current and prospective clients. Advisers would have to supply plainly written brochures to supplement bare-bones information now available online.

Regulators first called for expanded online disclosure from advisers in 2000 but the idea proved controversial, and the SEC eventually settled on a requirement for advisers to provide basic information online, leaving details in printed brochures.

Although advisers now may provide online brochures to state regulators, they aren't required to supply them to the SEC or investors. Moving to a mandatory electronic filing to state and federal regulators is expected to reduce compliance costs for nearly 10,000 investment advisers and yield savings on printing and mailing costs.

SEC Commissioner Paul Atkins said the revised proposal is better than the one offered eight years ago, but questioned whether the detail sought by the agency might produce lengthy brochures that are "unappealing" to investors.

SEC staffers said the online brochures need not be hefty, suggesting the required information might be packaged into a 12-page document.