November 2, 1989
TO: SEC RULES COMMITTEE NO. 65-89
CLOSED-END FUND COMMITTEE NO. 47-89
UNIT INVESTMENT TRUST COMMITTEE NO. 73-89
INVESTMENT ADVISERS COMMITTEE NO. 44-89
RE: INSTITUTE COMMENT LETTER ON AMENDMENTS TO RULES UNDER
SECTION 16
__________________________________________________________
As we previously informed you, the SEC has reproposed
amendments to the rules under Section 16 of the Securities
Exchange Act of 1934, governing reporting and short-swing profit
recovery of certain insider transactions. (See Memorandum to SEC
Rules Committee No. 51-89, Closed-End Fund Committee No. 35-89,
Unit Investment Trust Committeee No. 53-89 and Investment
Advisers Committee No. 35-89, dated August 23, 1989.)
Attached is a copy of the Institute's comment letter on the
reproposed amendments, a draft of which was previously circulated
to you. (See Memorandum to SEC Rules Committee No. 64-89,
Closed-End Fund Committee No. 45-89, Unit Investment Trust
Committee No. 71-89 and Investment Advisers Committee No. 42-89,
dated October 16, 1989.)
The comment letter makes the same principal points set
forth in the draft. Specifically, the Institute (1) supports the
proposed exemption for customer accounts managed by "13G
Institutions" in determining insider status and opposes the
limitations on this exemption discussed in the SEC release, (2)
supports the proposed safe harbor for performance fees, but
recommends that it be expanded to cover non-performance related
fees as well and (3) requests clarification that an investment
company will not be deemed an insider if a member of its board of
trustees is an insider with respect to a class of securities.
We will keep you informed of developments.
Craig S. Tyle
Associate General Counsel
Attachment