August 13, 1990
TO: MEMBERS - ONE PER COMPLEX NO. 33-90
RE: PRICING DIFFICULTIES EXPERIENCED ON AUGUST 13, 1990
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Questions have been raised regarding the fire-related power
failure affecting the ability to obtain complete prices for
securities traded on the New York and American Stock Exchanges
and in the NASDAQ market. The SEC staff has confirmed that the
situation is covered by Investment Company Act Release No. 14459
(June 6, 1985) which provides, in relevant part, that:
"...where a fund is unable, due to emergency conditions, to
complete the mechanical process of pricing on a day when it would
normally be required to do so under Rule 22c-1, the price for
that day may be calculated subsequently and applied to sales,
redemptions, and repurchases that were in fact received in the
mail or otherwise on that same day.
"...The fund is expected to make every effort to price
investor orders for purchase and redemption on the day the order
is actually received, and to establish procedures so as to
reasonably be able, following an emergency closing, to insure
that investor orders can be given the price that, but for the
emergency, would have been computed on the day of actual receipt.
Nonetheless, if the fund is unable to segregate orders received
on the emergency closed day from those received on the next day
the fund is open for business, the fund may give all these orders
the next price calculated after operations resume."
Donald E. O'Connor
Vice President, Operations