“SEC’s Disclosure Demands Put Funds in Catch-22”
Ignites (A Financial Times Publication), December 2, 2010
Steven Scholes urged the SEC to “avoid the temptation” to address mutual fund and other investment company disclosures concerning derivative use and risk by using enforcement proceedings rather than rulemaking. Such disclosures have until now been made using the SEC’s “plain English” rule, which the agency now criticizes as inadequate. “The SEC should issue clear rules … and avoid subjecting funds to the dilemma of making disclosures that are deemed, with the clarity of perfect hindsight, either ‘generic’ or ‘technical’ after the fact,” Mr. Scholes wrote.