As the window for compliance with new Securities and Exchange Commission rules draws to a close, fund companies are gearing up for the first stage, while maintaining their opposition to the second.

The new SEC rule -- approved in January , effective Aug. 6 -- requires that fund companies disclose their proxy voting policies, as well as the actual votes. The fund must inform shareholders that its voting policy is available on the SEC Web site , as well as through the fund company itself, free of charge.

Beginning in August 2004, the specifics of all proxy voting records must be disclosed annually on Aug. 31 and posted on the fund's Web site or available upon request. The records must include a brief summary of the matter voted on; whether the resolution proponent was management or a shareholder; whether the fund cast a vote on the matter and, if so, how it was cast; and whether that vote was for or against management recommendation.

Many large fund companies had bellyached that the stricter-than-expected rules were far too onerous and unnecessary to boot.

One argument, along the lines of "a little knowledge is a dangerous thing," is not unconvincing. How a fund votes in the thousands of proxy contests each year is arguably not where investors should pour their research energy. Fidelity, for instance, votes in more than 5,000 proxy contests a year. The largest fund family also posts its guidelines for proxy voting on its site , noting its policy against repricing stock options without shareholder approval, as well as other issues of executive compensation. Beyond that, though, the company doesn't think greater disclosure will help -- and could very likely hurt -- shareholders.

But other more spurious arguments, such as "that level of disclosure would be prohibitively expensive," ring hollow, says Kunal Kapoor, associate director of fund analysis for Morningstar. "Any argument centered around cost is unfounded," he says. "Fund companies must be keeping track of these votes already; disclosing that information shouldn't cost much."

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