The U.S. Securities and Exchange Commission acted Thursday to require mutual funds to disclose to investors how they voted on decisions at the companies whose shares they hold.

In a 4-1 vote, the SEC commissioners adopted a rule that has drawn objections from the mutual fund industry, including heavyweights Vanguard and Fidelity, as being unnecessarily burdensome and costly.

Under current rules, fund companies have no obligation to tell anyone how they cast their ballots on anything from an acquisition by General Electric Co. to who is on the board of Microsoft Corp. — not even investors on whose behalf the votes were collectively cast.

Starting in July, fund companies will be required to tell shareholders who request such information how they cast their proxy votes.

"There are conflicts of interest in the way votes are exercised," or at least potential conflicts, SEC chairman Harvey Pitt said before the vote.

But commissioner Paul Atkins, who voted against adopting the rule, warned that it "will impose costs upon funds that will decrease shareholder returns."

And commissioner Cynthia Glassman, who supported the rule with reservations, said she had seen no compelling evidence that investors are interested in how their mutual fund companies vote.

The industry says a fund's proxy votes can number in the thousands, as many funds have hundreds or thousands of company holdings.

To make it less costly for the industry, the SEC modified its earlier proposal so that fund companies will be required only to make the voting information available on the Internet, not to mail the material to shareholders.

The Investment Company Institute, the fund industry's lobbying group, has said it is unclear whether electronic disclosure would be feasible and less burdensome than mass mailings.

The SEC also voted Thursday to adopt a rule that outside corporate lawyers must go to company officials if they suspect fraud. That was a weakened move from an earlier proposal that also would have required lawyers to inform the SEC if they couldn't get company officials to stop the fraud.

Companies themselves will be required to notify the SEC if attorneys have resigned in protest, as they must do when an accounting firm resigns from auditing a company's books.

The SEC put out for an additional 60 days of public review the requirement for attorneys to inform the agency.

Groups representing attorneys, such as the American Bar Association, had objected to the SEC proposal, saying it improperly exceeded Congress' mandate in the corporate fraud law. Critics say it could hurt attorney-client confidentiality and inhibit companies in their communications with outside lawyers.

The ICI estimates that more than 200 mutual funds, representing 14.5 million shareholders, would have to produce disclosure spreadsheets totaling 99 pages or more each, on average.

Such disclosure would be too expensive and not very helpful, the group says. ICI spokeswoman Elizabeth Powell estimated the cost at $900 million over 20 years.