The U.S. Securities and Exchange Commission voted to adopt rule amendments that are designed to improve the transparency of mutual funds concerning market timing.

The amendments will require a mutual fund to describe in its prospectus the risks that frequent trading of fund shares may present for other shareholders. They will also require disclosure of whether the fund’s board of directors has adopted policies and procedures with respect to frequent trading; and, they will require a mutual fund to describe in its prospectus any policies and procedures for deterring frequent purchases and redemptions of fund shares; among other things.

The amendments will also require mutual funds and insurance company managed separate accounts that offer variable annuities to disclose the circumstances under which they will use fair value pricing and to disclose their policies and procedures regarding disclosure of portfolio holdings.

The SEC also voted to adopt a rule designed to provide foreign banks exemption from insider lending prohibitions of the Sarbanes-Oxley Act, under certain conditions. The rule will establish a more level playing field for foreign and domestic banks regarding insider lending while remaining consistent with the goals of Sarbanes-Oxley.

And, it proposed for comment new rules regarding shell companies, and “reverse mergers”. The proposals are intended to protect investors by deterring fraud and abuse in the securities markets through the use of shell companies.