February 1, 1990
TO: MEMBERS - ONE PER COMPLEX NO. 4-90
SEC RULES MEMBERS NO. 11-90
DIRECT MARKETING COMMITTEE NO. 4-90
PUBLIC INFORMATION COMMITTEE NO. 2-90
SALES FORCE MARKETING COMMITTEE NO. 4-90
SHAREHOLDER COMMUNICATIONS COMMITTEE NO. 3-90
NEWSLETTER COMMITTEE
RE: GUIDELINES FOR FUND NEWLETTERS
__________________________________________________________
We are pleased to report that the SEC Division of
Investment Management has responded affirmatively to an Institute
letter that sets forth guidelines for fund newsletters. A copy
of the Institute's letter and the staff's reply are attached.
The guidelines are the product of a series of
communications between the Institute and the staff. In December
1987, the staff distributed a letter to a large number of fund
complexes requesting various information about their newsletters,
including their legal status under the Securities Act of 1933.
The Institute formed an ad hoc committee of members and submitted
a memorandum prepared by outside counsel in July 1988 setting
forth general conclusions about the legal status of newsletters.
(See Memorandum to Members - One Per Complex No. 31-88, SEC Rules
Members No. 37-88, Direct Marketing Committee No. 24-88, Public
Information Committee No. 24-88, Shareholders Communications
Committee No. 27-88 and Newsletter Committee, dated July 19,
1988.) Further communications between the Institute and the
staff explored in greater detail the applicability of various
rules under the Securities Act to fund newsletters.
Among the more significant items contained in the
guidelines are the following:
-- Newsletters may contain both material permitted by Rule
134 (commonly referred to as "tombstone ads") and material
permitted by Rule 482 (including performance ads).
-- Each Rule 134 or Rule 482 unit must be segregated from
other material in the newsletter and must include the appropriate
legends. (Where more than one Rule 134 or Rule 482 unit appears
on a single page, the legend need only appear once.)
-- A single Rule 134 or Rule 482 unit may contain
information concerning more than one fund. (Thus, a newsletter
could include a performance table for several funds within a
complex.) The material relating to each fund must be separate
and distinct, so that it can be identified as referring to that
fund.
-- Newsletters may also contain non-offering material (also
referred to as "free writing").
-- Newsletters generally should be filed with the NASD or
SEC, as appropriate.
The Institute is considering holding a meeting for
Institute members to discuss implementation of the above
guidelines. If you would be interested in attending such a
meeting, please call Sue Burgess at 202/955-3513.
Craig S. Tyle
Associate General Counsel
Attachment