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The Pitched Battle Over Mutual Fund Reports You Probably Don’t Even Read
If I read the above correctly, funds would no longer be required to make paper copies of fund reports available to investors. I get it. Saves money and trees. Can't stop progress I suppose.
Personally, much as I enjoy pleasure reading in digital form, there's something unique about legal/financial language and content that I find easier to digest in print. I wouldn't want to sign off on a 30 year mortgage for which I'd seen only a digital copy. I find Barrons much more more rewarding in print. And I don't like the thought of handing over my hard earned money to a firm whose reports exist only in the digital realm.
The suggestion in the article byline that most investors don't bother to read their fund reports sounds absurd. If you trust your manager enough to give him/her your money to invest, surely you value his or her insights into the markets and his/her unique perspectives on why the fund is invested the way it is. Not read the reports? Nuts.
The proposal doesn't do away with paper. It just makes paper opt-in, rather than opt-out. Even if you've chosen electronic, it would require funds to send a printed version at no cost on demand, within three days of your request.
The proposal doesn't require funds to even offer electronic versions, let alone make them the default.
@hank 's got the right link. The part of the doc pertaining to the paperless proposal (a new Rule 30E-3) starts on p. 149. What's there is a clear discussion of the background, the thinking, and how the rules would work. That is, English as opposed to actual legalize text of the proposed rule.
The Bloomberg article cites Roll Call as estimating the potential savings at $2B/decade. According to the SEC report, the savings are way less than that. Total printing costs are about $116M, and given the number of funds/investors expected to participate, the savings on printing would be about $105M/year. Offsetting that are new costs (maintaining web site, mailing paper copies on demand, etc.) totaling about $32M/year.
Net savings/decade (my calculation) = ($105M - $32M) x 10 = $3/4B. IMHO the real savings are in costs to the environment - trees (as mentioned in Bloomberg), energy for paper recycling (or landfill), and mailing/shipping (fuel).
Comments
If I read the above correctly, funds would no longer be required to make paper copies of fund reports available to investors. I get it. Saves money and trees. Can't stop progress I suppose.
Personally, much as I enjoy pleasure reading in digital form, there's something unique about legal/financial language and content that I find easier to digest in print. I wouldn't want to sign off on a 30 year mortgage for which I'd seen only a digital copy. I find Barrons much more more rewarding in print. And I don't like the thought of handing over my hard earned money to a firm whose reports exist only in the digital realm.
The suggestion in the article byline that most investors don't bother to read their fund reports sounds absurd. If you trust your manager enough to give him/her your money to invest, surely you value his or her insights into the markets and his/her unique perspectives on why the fund is invested the way it is. Not read the reports? Nuts.
I for one would miss the paper-based fund reports ... I prefer hardcopy to flip thru versus scroll through on the couch or plane.
Not to mention, they make great bathroom reading!
Regards,
Ted
The proposal doesn't require funds to even offer electronic versions, let alone make them the default.
@hank 's got the right link. The part of the doc pertaining to the paperless proposal (a new Rule 30E-3) starts on p. 149. What's there is a clear discussion of the background, the thinking, and how the rules would work. That is, English as opposed to actual legalize text of the proposed rule.
The Bloomberg article cites Roll Call as estimating the potential savings at $2B/decade. According to the SEC report, the savings are way less than that. Total printing costs are about $116M, and given the number of funds/investors expected to participate, the savings on printing would be about $105M/year. Offsetting that are new costs (maintaining web site, mailing paper copies on demand, etc.) totaling about $32M/year.
Net savings/decade (my calculation) = ($105M - $32M) x 10 = $3/4B.
IMHO the real savings are in costs to the environment - trees (as mentioned in Bloomberg), energy for paper recycling (or landfill), and mailing/shipping (fuel).
You can find the comments that people (and companies) have submitted here:
https://www.sec.gov/comments/s7-08-15/s70815-123.pdf