Because the SEC will be submitting an additional progress report in June 2001, I would appreciate receiving GAO's response before that time. While this competition is healthy, it is important to ensure that investors in these less regulated products receive comparable levels of disclosure about the fees they pay. I therefore urge the SEC to develop fee disclosure requirements for these products similar to those applicable to mutual funds. I also strongly urge the SEC to take final action on the pending proposed rule amendments that would require disclosure of standardized mutual fund after-tax returns. I commend the SEC for recognizing that taxes can play an even bigger role than fund expenses for many investors in determining the outcome of their investments.
Investors pay greater attention to both in a climate of plummeting returns.
Second , I agree with the SEC's actions to enhance the role of independent directors and with private-sector initiatives to enhance information and other support services to these directors. Independent directors play an extremely important role in maintaining the integrity of the mutual fund industry and thereby providing a strong line of defense against confidence-shaking debacles. In 1986, the Ranking Republican Member of the Telecommunications and Finance Subcommittee and I both wrote to the SEC, in response to constituent complaints and personal experience, with respect to allegations of various abusive practices, and the SEC submitted a 14-page report in September 1986. The fund industry withdrew its opposition to tabular presentation of recurring and nonrecurring fund expenses, and the end result was significant improvements in fee disclosure with dramatic benefits to consumers. However, as discussed in detail in the Division's report, a great deal has changed in the 12b-1 area in the last 15 years.