August 11, 1989
TO: UNIT INVESTMENT TRUST COMMITTEE NO. 50-89
RE: SEC ADOPTS RULE 11a-3; TAKES NO ACTION ON RULE 11c-1
__________________________________________________________
The SEC has adopted Rule 11a-3 under the Investment Company
Act, governing exchange offers by mutual funds. In the release
adopting Rule 11a-3, the SEC stated that it was continuing to
consider whether to adopt proposed Rule 11c-1, which would govern
exchange offers by unit investment trusts and their sponsors.
The Institute had opposed adoption of Rule 11c-1, stating in its
comment letter that the proposed rule would not codify existing
exemptive orders and would not provide adequate compensation for
sponsors maintaining secondary markets. (See Memorandum to Unit
Investment Trust Members No. 12-87, dated March 27, 1987.) The
SEC stated that, until action is taken on proposed Rule 11c-1, it
will continue to consider exchange offers involving unit
investment trusts on a case-by-case basis.
We will keep you informed of developments.
Craig S. Tyle
Assistant General Counsel