The U.S. Securities and Exchange Commission requires that funds make extensive disclosures to investors. These disclosures are contained in fund registration statements, shareholder reports, and proxy statements. As signatories of a fund’s registration statement, directors may be liable under the federal securities laws for material misstatements or omissions in it, including in the prospectus. For this reason, directors should be familiar with fund disclosures and satisfy themselves that the disclosures are accurate and complete. Further, prudence suggests that directors be comfortable with the process by which fund disclosures are prepared and updated.
