The Securities and Alternate Fee plans to contemplate Wednesday a ultimate rule to deal with sure broad classes of funding firm names which are more likely to mislead buyers about investments and dangers.

The proposed amendments the fee will think about “additionally embody enhanced prospectus disclosure necessities for terminology utilized in funding firm names, in addition to public reporting relating to compliance with new names-related necessities,” in response to a discover on the company’s web site.

Funding firm names embody these of mutual funds, ETFs and enterprise improvement firms.

A spokesperson for the Funding Firm Institute, a commerce group for the fund trade based mostly in Washington, instructed ThinkAdvisor Monday that the ICI continues “to be involved by the sweeping scope of the proposed names rule.”

ICI, the spokesperson mentioned, “is aware of the rule can be extremely pricey, impacting 10,000 funds. By the SEC’s personal price estimate, that will add as much as a multibillion-dollar implementation burden. Such prices will hurt the top investor. It’s additionally troublesome to see why this rule is required. There has not been a spate of points with fund names; actually, the SEC’s personal examination priorities haven’t listed fund names for the previous 4 years.”

The proposed rule, the spokesperson mentioned, “would even seize subjective phrases like ‘development’ and ‘worth,’ which within the case of index funds, are outlined in a different way by totally different index suppliers. We hope that the SEC has taken our considerations into consideration as they transfer to finalize the rule. Fund names don’t, and can’t, talk every little thing that buyers wish to learn about a fund earlier than investing.”

The SEC mentioned in January that it deliberate to challenge a ultimate rule on the difficulty in October.