September 14, 1989
TO: SEC RULES MEMBERS NO. 50-89
INTERNATIONAL FUNDS TASK FORCE NO. 13-89
UNIT INVESTMENT TRUST COMMITTEE NO. 62-89
INVESTMENT ADVISERS COMMITTEE NO. 38-89
RE: INSTITUTE COMMENTS ON REPROPOSED RULE 144A
__________________________________________________________
The Institute has filed the attached comment letter with
the Securities and Exchange Commission on reproposed Rule 144A,
which would provide a safe harbor exemption from the registration
requirements of the Securities Act of 1933 for the resale of
restricted securities to certain institutional buyers. (See
Memorandum to SEC Rules Committee No. 39-89, International Funds
Task Force No. 5-89, Investment Advisers Committee No. 27-89 and
Unit Investment Trust Committee No. 35-89, dated July 17, 1989.)
The Institute commented on several technical points
concerning the revised definition of "family of funds" in the
reproposal. Specifically, the Institute recommended that the
definition include two or more funds that are managed by
affiliated advisers, along with funds that are managed by the
same adviser. We also requested that the Commission delete the
word "separately" from the definition which refers to two or more
"separately registered investment companies," since it does not
seem to have any particular relevance for purposes of the
definition. Finally, we recommended that the definition of
"family of funds" be modified to permit insurance companies to
aggregate the assets in their insurance separate accounts with
the assets in their other funds.
The Institute also commented that investment advisers
eligible to purchase securities under the reproposed Rule should
be permitted to purchase securities thereunder for its
discretionary accounts, as well as for its own account. With
respect to the information requirements in the reproposal, we
recommended that the issuer, rather than the seller, be
responsible for providing the required information to a buyer
upon request. Concerning the issue of liquidity of securities
sold under the reproposed Rule, the Institute supported the
approach outlined in the reproposal of having the board of
- 2 -
directors of a mutual fund and the trustee or evaluator of a UIT
determine the liquidity of such securities.
We will keep you informed of developments.
Amy B. Rosenblum
Assistant General Counsel
Attachment