Our friends at the SEC are busy trying to make the world safer for investors and, as always, they'd like your feedback on some proposed rule changes.
The proposed changes
To shine light on the fact that some brokers get paid more when you buy into one mutual fund from them than when you buy into another, the SEC is planning to require brokers to inform you of how much they (and their firms) stand to earn if you buy various funds.
This is a good thing to do, as it will help investors make informed decisions when allocating their money. If you can see that a broker gets a lot more money by recommending Fund A than other funds, you'll perhaps think twice about signing up for Fund A before learning more about Funds B, C, D, etc.
The requested feedback and how to give it
The SEC is mainly interested in finding out if the forms they've designed for disclosure are clear enough for you. Here's a peek at the forms (pdf file), courtesy of the National Association of Investors Corp. (NAIC).
Comments are due by April 12, and any comments you submit will be available for others to see. You can comment by snail mail, but you're requested to do so in triplicate. Mail the three copies to: Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth St., N.W., Washington, D.C. 20549-0609. A simpler route may be to email your comments to [email protected], making sure to refer to "File No. S7-06-04" in the subject line. (Do you sense a smidgen of bureaucracy at work here?) Or comment via the SEC's website's comment form.
These requests for comments aren't lip service to the public. The SEC has long welcomed our input and, indeed, we Fools were instrumental in pushing through some much-needed reforms on Wall Street -- believe it, from the mouth of former SEC Commissioner Arthur Levitt. So go ahead and have your say!
Keep an eye on the SEC website for other initiatives and calls for comments as they arise.
If all these financial issues make your head hurt, take a 30-day free trial of our TMF Money Advisor service -- it's an inexpensive way to access one-on-one, professional financial advice tailored to your personal needs.
Longtime Fool contributor Selena Maranjian doesn't own shares of any companies mentioned in this article and has never owned the SEC.
