SEC Adopts Rule Aimed at Curbing Misleading Fund Names

The Securities and Exchange Commission announced Wednesday that it has adopted a rule that will require mutual funds to invest at least 80% of their assets in those securities that the fund's name suggests, replacing the 65% cutoff previously required.

The SEC said the rule is intended to provide investors greater assurance that a fund's investments are consistent with its name and to help reduce investors' confusion when they are choosing specific types of funds.

Any fund wishing to change the 80% investment policy must first obtain the approval of shareholders or notify shareholders at least 60 days in advance of the change. Funds whose names do not connote a particular type of investment are not obligated to this rule, the SEC said in a press release. ...