DRAFT COMMENT LETTER ON PROPOSED PROSPECTUS DISCLOSURE OF RANGE OF ACTUAL FRONT-END SALES CHARGES - RESPONSE REQUESTED BY 11/08

[18163] November 5, 2004 TO: SEC RULES COMMITTEE No. 85-04 RE: DRAFT COMMENT LETTER ON PROPOSED PROSPECTUS DISCLOSURE OF RANGE OF ACTUAL FRONT-END SALES CHARGES - RESPONSE REQUESTED BY 11/08 In recent discussions with members, a concern arose about provisions in a pending SEC proposal relating to prospectus disclosure concerning front-end sales charges. The SEC’s point of sale and confirmation disclosure proposal would require funds to disclose in their prospectuses, if applicable, that the actual front end sales load that may be paid by an investor may be different from that disclosed in the prospectus, and briefly explain why (i.e., due to rounding). Funds also would have to disclose both the actual maximum front-end sales charge that may be paid by an investor and the range of actual front-end sales charges that may be paid by an investor at each breakpoint, as a percentage of the gross amount invested and as a percentage of the net amount invested. The Institute has prepared the attached draft comment letter recommending that the SEC refrain from adopting the requirements to disclose the actual maximum front-end sales charge and the ranges of actual front-end sales charges. The draft letter argues that this disclosure will not help investors and is unnecessary. We plan to file our comment letter early next week. Please provide any comments on the attached draft letter by the close of business on Monday, November 8th. I can be reached by phone at 202/326-5822, by fax at 202/326-5827, or by email at frances@ici.org. Frances M. Stadler Deputy Senior Counsel Attachment (in .pdf format)