SEC Releases FAQs Related to Final Rule on Tailored Shareholder Reports

The staff in the SEC’s Division of Investment Management has released a series of FAQs related to the Commission’s October 2022 final rule on tailored investment reports for mutual funds and exchange-traded funds. Under the final rule, such funds are required to “transmit concise and visually engaging annual and semi-annual reports to shareholders . . . under the Investment Company Act of 1940 . . . and to promote transparent and balanced presentations of fees and expenses in investment company advertisements.”

The FAQs are divided into the following broad topics:

• The meaning of an “appropriate broad-based securities index.”
• Form N-CSR and the Web site availability requirements.
• Binding individual shareholder reports of multiple funds.
• Electronically provided shareholder reports.
• Compliance date and inline XBRL issues.