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Mutual Fund Education

SEC to Let Mutual Funds Go Paperless in 2021

Brian Mathews Jul 03, 2018



Let us go over the implications of the new ruling.

Find out about the most important criteria for selecting a mutual fund here.


Rule 30e-3


In an effort to be more cost-efficient, the SEC will soon allow a fund to deliver its shareholder reports by making them publicly accessible on a website, free of charge, and sending investors a paper notice of each report’s availability by mail. This ruling is to be effective January 1, 2021.

Click here to get a better understanding of the mutual fund prospectus.


Benefits for Investors


Another benefit for shareholders is also a large benefit to the investment companies. According to the Investment Company Institute, this new ruling will save nearly $2 billion over the next decade. If investment companies are no longer required to print out reports and pay for the postage for every shareholder, they should undoubtedly see a significant reduction in administrative costs. That savings could possibly be passed directly to the investor by lowering the fund’s expense ratio. The American Funds AMCAP A (AMCPX) fund, for example, had a direct line item for reports to shareholders in its annual report ending as of February 28, 2018. The annual cost for the AMCAP fund to produce and mail all of its shareholder reports was $1.85 million. With the new ruling, this cost should be cut significantly, which could result in American Funds reducing the AMCAP fund’s expense ratio.

Click here to find out the where mutual fund expenses are headed.


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