Commissioners of the U.S. Securities and Exchange Commission (SEC) voted 4-0 in favor of the proposal to require funds to provide a summary prospectus with key information in plain English, in a clear and concise format, and to distribute more information online, Reuters reported.

The proposal would mandate the inclusion in a prospectus of items such as risk and return, the fund’s investment objectives, costs, and a brief summary of its top 10 portfolio holdings along with a discussion of potential tax consequences of investing in that fund, according to the news report.

Investors would be able to choose how they would like to receive the summary — on paper or online.

“This proposal is a giant step forward for investors,” SEC Chairman Christopher Cox said at a commission meeting, according to Reuters.

According to the news report, Commissioner Paul Atkins was supportive of the overall plan but expressed reservations about the cost for funds to change their prospectuses to include the summary. He also questioned whether the top 10 holdings was key information. “There is always the possibility that there is some element of window dressing by funds,” Atkins said.

Washington attorney Jamey Delaplane, who specializes in Employee Retirement Income Security Act (ERISA) issues, told a recent Webinar co-sponsored by the Women’s Pension Exchange and PLANSPONSOR that the U.S. Department of Labor is likely to use the SEC proposed disclosure form as a regulatory template for other required participant disclosures (See Retirement Plan Fee Debate Likely to Continue Past 2008 Elections).