SEC Declares 'War' on Fund Complexity

Cox said tagging the data with a new technology called XBRL, or eXtensible Business Reporting Language, will make the data "far more efficient than it is today and virtually error free." He said XBRL is "sweeping the world" as banks and other financial institutions use the technology, and he was pleased the ICI was "embracing" the technology.

He added that the agency plans to make a proposal that would allow mutual funds to file SEC disclosures and other documents by email. It would also allow investors to voice their preference on receiving documents from their funds either by email or snail mail.

The SEC also wants more disclosure from the 401(k) industry. Cox said the SEC wants 401(k) plans to increase their disclosure of information so investors have an easier time understanding the aggregate expenses and after-tax returns of their accounts.

"We will continue to purge all the legalese and convert it to plain English," said Cox. "But getting rid of the gobbledygook is no easy task. But we want to give every investor the info to achieve sound investment decisions."

In a press conference after the speech, Cox was asked if the SEC planned to appeal a recent decision by the U.S. Court of Appeals of Washington, D.C, to strike down the regulatory body's controversial "Merrill Lynch rule." The rule allows broker-dealers to give investment advice without the fiduciary duty of an investment advisor. Cox said the agency has until Monday to decide whether to appeal the decision.

The chairman addressed other issues during the conference. He said the SEC was working on new rules for mutual fund governance, including reviewing the requirement rules for putting independents on boards of directors.

He also said the commission planned to do a top to bottom review of 12b-1 fees. The 27-year-old fees originally designed to pay for marketing expenses have morphed away from their original purpose, he said, and the SEC will propose a formal review by year end. The movement for more disclosure from 401 (k) plans will occur over the next 18 months.

In reference to a recent study concluding there is no evidence that the Sarbanes-Oxley Act is responsible for making U.S. markets less competitive, which is a charge the financial community has made, Cox said he was opposed to changing the law, "We are in accord with the view of Congress on that."

On the issue of exchange-traded funds, he said the SEC was working hard to approve ETFs faster than the current pace and that regulators were looking for ways to make the process more routine.

Finally, Cox was asked if Apple Inc. (AAPL Quote)had been let off the hook for options backdating because it had co-operated with regulators. He said the Apple backdating investigation was still ongoing, and thus, couldn't comment further.