SEC Chief Upbeat About Proposed 'Profile' Prospectus

Securities and Exchange Commission Chairman Arthur Levitt affirmed his support Wednesday for the streamlined mutual fund prospectus proposed by the Investment Company Institute.

The SEC looks forward to reviewing the institute's study of more than 1,000 investor reactions to the prototype "profile" prospectus, Mr. Levitt said at the institute's annual membership meeting.

The institute submitted the proposal Monday along with research it conducted on investor response.

"From what I can see, those results support our longstanding interest in enhancing the profiles' discussion of risks, comparing fund performance to a market index, and providing key information about the fund's portfolio," Mr. Levitt said.

Nonetheless, a shorter prospectus alone will not eliminate investor confusion, he said.

The SEC found in focus groups "that investors didn't necessarily want more or less information - they wanted more understandable, more meaningful information," he said.

Mr. Levitt urged the fund industry to "speak to investors in simple English," and said the SEC will release within two months a handbook to help prospectus writers do just that.