December 19, 1989
TO: CLOSED-END FUND MEMBERS NO. 70-89
RE: NOTICE TO EXCHANGES IF DIVIDEND DECLARED BEFORE YEAR-END
_________________________________________________________
The President signed the Omnibus Budget Reconciliation Act
of 1989 this morning. Under one provision of this new law,
regulated investment companies (RICs) holding portfolio
securities having an ex-date on or after December 20, 1989 will
include the dividends in income for tax purposes on the ex-
dividend date rather than the date upon which the dividend is
received.
Any RIC that has not yet declared dividends sufficient to
meet its minimum distribution requirement (because the ex-
dividend provision will result in more dividend income than the
RIC expected) may wish to declare a dividend before year-end.
The Institute has contacted the New York Stock Exchange,
the American Stock Exchange and NASDAQ regarding the possible
need for such a dividend. Each exchange has expressed a
willingness to let RICs declare such a dividend with a December
29, 1989 record date. RICs are requested to contact the relevant
exchange immediately (and preferably by the close of business
December 20, 1989) if such a dividend may be needed. The
relevant contact people are:
NYSE Tony Aliberti (212) 656-5034
or
Pat Selenczak (212) 656-5023
AMEX Juanita Burton (212) 306-1485
NASDAQ Uniform Practice Dept. (212) 858-4341
(mention that Grant Callery is aware of
problem)
Keith D. Lawson
Assistant General Counsel