June 11, 1991
TO: BOARD OF GOVERNORS NO. 41-91
MEMBERS - ONE PER COMPLEX NO. 27-91
SEC RULES COMMITTEE NO. 33-91
1990'S AD HOC COMMITTEE
RE: THE INVESTMENT COMPANY INDUSTRY IN THE 1990'S
__________________________________________________________
Enclosed is a copy of "The Investment Company Industry in
the 1990's", a report prepared for the Institute by Stephen K.
West of the law firm of Sullivan & Cromwell. The report was
initiated in the fall of 1988 as part of the Institute's broad
"1990's Project" and was conceived as a vehicle to precipitate a
fundamental rethinking of the appropriate regulation of pooled
investment products sold to the public. Accordingly, the report
outlines for consideration various possibilities for changes from
the present regulatory structure for investment companies ranging
from radical to minor. Also included in the report are
recommendations for regulatory changes adopted by the Board of
Governors of the Institute in October 1990.
The general concepts and possibilities for an appropriate
structure for investment company regulation were developed prior
to the publication of the SEC's concept release of June 15, 1990,
which solicited comments on reform of the regulation of
investment companies. (See Memorandum to Board of Governors No.
43-90. SEC Rules Members No. 43-90, Members - One Per Complex No.
23-90, Closed-End Fund Members - One Per Complex and Unit
Investment Trust Members - One Per Complex, dated June 18, 1990.)
However, the content of the report and the recommendations of the
Board of Governors overlap the issues raised in the SEC concept
release to a large extent, although each also raises issues not
addressed by the other.
With respect to the Commission's review of investment
company regulation, we understand the SEC staff is currently
formulating recommendations for Commission approval to be
followed by rule-making proposals and legislative recommend-
ations. We will keep you apprised of developments in this
regard.
Lawrence A. Rogers
Senior Counsel