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Enhanced Notice Approach to 30e-3

A new approach to improve the shareholder experience and help the industry achieve greater cost savings.

Broadridge is working with investment companies, broker-dealers, and investor advocates to improve the investor experience in accessing and using regulatory disclosures, while also reducing the costs of printing and postage.

On December 7, 2017 the SEC’s Investor Advisory Committee (“IAC”) recommended an enhanced notice approach for the internet availability of annual and semiannual mutual fund reports. The IAC recommended layered disclosure giving investors key information in an easily digestible format and making detailed information available on websites or by request. Such disclosures should be delivered by mail or e-mail depending on each investor’s delivery preference. The recommendation provides an optional delivery alternative for investment companies. It would provide greater cost savings and encourage greater enrollment in e-delivery than the approach outlined originally in the SEC’s proposed rule 30e-3 (“Investment Company Reporting Modernization”).

Broadridge has analyzed these recommendations and the enhanced notice approach. We believe it could be executed with visually engaging content in a standard one-page format that allows shareholders to easily access and view important information that is “investor friendly” (i.e., in charts and graphs). Access to complete reports can be provided on the internet. Shareholders could request a mailed copy of the full report at no cost, and sign up for e-delivery.

The enhanced notice method offers the potential for significant annual savings for investment companies and their investors.

  • Broadridge estimates cost savings* in printing, postage, and forms of approximately $110M.
  • In addition, because investors would be provided with key information without having to take extra steps, there would be additional one-time savings of $70M from the elimination of extra mailings associated with the original proposal’s “implied consent” feature.

Find additional details in our Frequently Asked Questions and an illustration of the enhanced notice.

*Savings based on analysis of estimated printing costs and actual costs for postage and forms for CY2016 mailings of all annual and semiannual fund reports to beneficial shareholders.

Find additional details in our memo, including