Appeal No. 2002-1697 Page 2
Application No. 09/023,039
mutual fund prospectus must be delivered to a prospective investor in a way that gives
him "notice and access." (Spec. at 1.) The delivery requirement can be met by sending
the prospectus via the U.S. Postal Service.
Delivering paper prospectuses and hard copies of other required documents
(e.g., "sticker updates" to prospectuses) to investors, however, is time consuming and
costly. The appellants estimate that "[p]rinting and mailing costs alone can amount to
thousands or millions of dollars per year for a single mutual fund." (Id.)
In contrast, the appellants use physical delivery of electronic media to obtain an
investor's consent to the electronic delivery of SEC-required data. (Id. at 2.)
Specifically, a diskette containing an electronic prospectus for a mutual fund is mailed
to a prospective investor. After inserting the diskette into a computer, the investor can
display and read the prospectus on the computer's monitor. In addition, software on
the diskette prompts the investor to consent to the electronic delivery of at least one
additional compliance document or to the electronic delivery of a notification of the
existence of at least one additional compliance document that he agrees to obtain and
review. Having secured the investor's consent, additional software electronically
communicates that consent to a server maintained by the issuer of the mutual fund or
an independent service. Depending on the consent obtained, the investor might later
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Last modified: November 3, 2007