NASD Notice to Members 03-77 - December 2003

Disclosure of Mutual Fund Expense Ratios in Performance Advertising; NASD Requests Comment on Proposed Amendments to Rules 2210 (Communications With the Public) and 2211 (Institutional Sales Material); Comment Period Expires January 23, 2004

Executive Summary

NASD proposes to amend Rules 2210 and 2211 to require all member communications with the public that contain investment company performance information (“performance advertising”) to present specified information about the fund’s expenses and performance in a prominent text box. These new requirements would improve investor awareness of the costs of buying and owning a mutual fund, facilitate comparisons among funds, and make presentation of standardized performance more prominent. NASD’s proposal would require that:

  • All performance advertising contain a text box that sets forth the fund’s (a) standardized performance information; (b) maximum sales charge; and (c) annual expense ratio; and
  • The text box information be presented in type size at least as large as non-standardized performance, if non-standardized performance information is included.

Questions concerning this Notice may be directed to Angela C. Goelzer, Counsel, Investment Company Regulation, Regulatory Policy and Oversight, at (202) 728-8120.

View Full Notice PDF 173 KB

The views, expressions, findings and opinions expressed in the comments on this Web page are solely those of the author(s) and FINRA accepts no responsibility for the content of the comments.

Comments By Date Received
John J. Carroll & Co. (PDF 58 KB) 1/9/2004
Nations Financial Group, Inc. (PDF 25 KB) 1/11/2004
SIA Investment Company Committee (PDF 58 KB) 1/22/2004
Kevin & Rita Murphy (PDF 25 KB) 1/23/2004
Northwestern Mutual Investment Services, LLC (PDF 58 KB) 1/23/2004
Oppenheimer Funds Distributor, Inc. (PDF 58 KB) 1/23/2004
Investment Company Institute (PDF 58 KB) 1/23/2004
T. Rowe Price Investment Services, Inc. (PDF 58 KB) 1/23/2004
Fidelity Investments (PDF 58 KB) 1/23/2004
The Vanguard Group (PDF 58 KB) 1/23/2004
Sherrets & Boecker LLC (PDF 147 KB) 1/30/2004