Distribution of Profiles meet prospectus delivery requirements
There are two "versions" of a prospectus: the 10(a) version and the 10(b) version called a "Profile." The 10(a) version is a long, complicated document whereas the 10(b) versions, particularly for retirement plan accounts, is relatively brief and more easily understood.
Unfortunately since the Security and Exchange Commission issuance of the Rule permitting the 10(b) prospectus, few fund companies have issued such.
Service providers find the delivery of prospectuses burdensome and the ability to deliver a Profile would ease the task. The Department of Labor issued an Advisory Opinion in September, 2003, that delivery by a Plan of a Profile could meet the prospectus delivery requirements of 404(c).
Most of the commentaries this website's author read unfortunately ignored the provision of the DOL's Advisory Opinion that the delivery of the Profile was not in compliance with 404(c) in those instances where the most recent form of the prospectus the Plan had received was the 10(a) prospectus.
A Plan must then determine in which instances can it deliver the 10(b) prospectus and when it must deliver the 10(a) prospectus.
In issuing its Advisory Opinion relating to the suitability of Profiles in lieu of the 10(a) prospectus, the DOL stated it took " no position with respect to the application of the federal securities laws ."
The SEC considers the Profile an "offering" document only, one that must be followed with delivery of the 10(a) prospectus upon investment by the participant or beneficiary.
Use of the Profile exclusively might constitute compliance with 404(c) while it is a violation of SEC rules.