SEC Commissioner Kara Stein said Thursday that the agency should consider mandating different levels of disclosures for significantly different types of investors.
The agency’s current “one-size-fits-all” approach to disclosure doesn’t work, Stein said.
She noted, for example, that tech-savvy investors could be best served by mounds of spreadsheet data, while a middle class husband and wife at the dinner table mulling over where to put their savings want simple summaries of a company’s financial information.
As a step to tailoring such disclosures, Stein said the SEC should follow the example of the Consumer Financial Protection Bureau. The bureau does research on varying segments of the public to gauge their ability to understand and use mortgage loan disclosures.
Stein said mutual fund disclosures need to be improved as well.
Speaking before the Consumer Federation of America’s annual financial services conference in Washington, D.C., she called investor protection the SEC’s central mission, above its duties to promote fair and orderly markets and capital formation, and yet also essential to those two goals.