Buddy Donohue, director of the SEC's investment management division, told attendees at the ICI Mutual Funds and Investment Management Conference on Tuesday that his staff is looking at possible improvements to annual reports, saying such efforts rank among the "higher priorities" in his team.

This year's conference, held at the JW Marriott Desert Ridge Resort & Spa, drew 1,100 attendees.

"One of the higher priorities inside my division right now is we're engaged in a process very similar to what we did with the summary prospectus," Donohue told the audience Tuesday morning. This time, the focus is on annual and semi-annual reports to shareholders.

Donohue made the comments in response to co-panelist Susan McGee, president and general counsel at US Global Investors, who inquired whether there's anything the SEC can do to simplify annual reports.

Donohue said there is a great opportunity to improve documents and make them more meaningful to shareholders.

"The amount of money that is spent on annual reports that shareholders throw out is just astronomical," Donohue said.

During the panel, Donohue tackled a slew of topics including 12b-1s, point-of-sale disclosure and ETFs.

Another panelist, Thomas Lemke, managing director and general counsel at Legg Mason, asked about the SEC's efforts around streamlining the ETF approval process. In March 2008, the commission proposed Rule 6c-11, which would allow ETFs to launch without having to secure individual exemptive relief. The rule would codify most of the exemptions that had been granted to passive and active ETFs.

"As probably many in the audience know, things can get in the way of the rule coming into final fruition," Donohue said.

"I'm interested in moving forward with this because in my division, resources are being taken up in the exemptive application area to handle 'routine-type' ETFs," he said. "It would free up resources to work on other exemptive applications."

Asked by Vanguard managing director and general counsel Heidi Stam, panel moderator, about the summary prospectus, Donohue replied: "It's important for all of us to make it successful and to avoid what some refer to as weeds and I refer to maybe as plants that people have put too much fertilizer on." 

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