As expected the SEC today approved new rules governing how mutual funds may advertise their investment performance. The SEC commissioners approved the rules with a 4-0 vote during a meeting Wednesday.

The commissioners also voted 4-0 to seek further public comment on a proposal to require more fee disclosure in funds-of-funds. Those new disclosure rules would effect both investment companies registered under the 1940 Act and hedge funds that invest in mutual funds.

The new ad rules require fund firms to provide performance figures updated to through the end of the most recent month. Until now, the SEC mandated that fund performance figures be current through the end of the most recent quarter. As before, ads must list performance for the past one, five and ten years.

While the ads can still carry information through the end of the most recent quarter the new rules require the ad to offer either a phone number or Website where investors could get the more up-to-date info.

Ads will also have to carry a disclaimer stating that "past performance is not an indicator of future performance."

Finally, fund ads will have to provide information on the fund's goals, risks and costs.  

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