May 19, 1989
TO: SMALL FUNDS COMMITTEE NO. 5-89
RE: CALIFORNIA EXPENSE LIMITATION COMMENT LETTER
__________________________________________________________
As you know, the California Department of Corporations
recently proposed to amend the expense limitation rule imposed on
mutual funds. (See Memorandum to State Securities Member No. 9-
89, dated March 8, l989.) Attached is a copy of the Institute's
comment letter to the Department.
The Institute commented that the proper course of action
would be to repeal or suspend the rule rather than adjust it as
conditions and circumstances change. However, in the event the
Department does not decide to repeal or suspend the rule, the
Institute requested that the proposed rule be clarified to
require expense limitation reports only from funds that must
reduce or rebate advisory and management fees or which are
relying on an order of exclusion. In addition, the Institute
requested that the Department continue to grant liberal waivers
from the rule.
We will keep you informed of developments.
Natalie Shirley
Associate General Counsel
Attachment