The Securities Industry Association has come out in support of the NASD’s proposal for improved, Web-based point-of-sale disclosure for mutual funds.

In its comment letter Tuesday on the Securities and Exchange Commission’s rule proposal on point-of-sale disclosure for mutual funds, SIA cited the NASD Mutual Fund Task Force’s Profile Plus proposal as an effective model for delivering via the Internet the information mutual-fund customers need to make informed decisions about their investment choices.

SIA argued that the SEC proposal’s requirement of paper disclosure documents would make the process both cumbersome and costly. “Investors should have point-of-sale disclosure that is timely, inexpensive, and that provides them with the complete picture – both the costs and potential rewards associated with the investment choices they consider,” SIA senior vice president and general counsel Ira Hammerman said. “This information should be presented in a clear, concise format, and be written in language that investors can readily understand. The Internet is a perfect vehicle for handling this job, which is one reason why SIA believes the NASD’s Profile Plus option provides an optimal solution for point-of-sale disclosure.”

The Profile Plus proposal, SIA said, would give investors the information they need in a format that is easily accessible. The Internet-based Profile Plus would provide investors with a two-page, easy-to-understand document that includes key characteristics of the fund, and all related fees and expenses, including the costs and potential conflicts associated with mutual-fund distribution.

The SIA’s comment letter is available at http://www.sia.com/2005_comment_letters/5802.pdf

The NASD Task Force Report is available at:
http://www.nasd.com/web/groups/rules_regs/documents/rules_regs/nasdw_013690.pdf