Mutual fund reporting to join the 21st Century… over the next two years
In today’s increaingly Connected Society and our Digital Lifestyle, in which credit card, brokerage and banks are practically forcing one to go paperless, only now are mutual fund companies able to do the same. Much like those that have already made the switch, it will save billions of dollars on paper and mailing costs – a potential positive to the bottom line, assuming they can hold off fee compression as a result of the booming ETF industry.
But let’s not get too excited by this as the transition to totally paperless will take two years to fully implement. We could lament on how slow that rate of change seems, but at least it’s happening, which means even the SEC is feeling the winds of change from our investment themes.
The Securities and Exchange Commission passed a new rule on Monday allowing mutual funds to send electronic reports to shareholders. Before rule 30e-3, mutual funds were required to send paper reports, costing the industry billions of dollars.
Companies will be required to provide two years of notice to shareholders before relying on the rule if they plan to discontinue providing paper reports before Jan. 1, 2022. If a client requests a print copy, mutual funds must provide them one without charge, according to the new rule.
