July 16, 1991
TO: SEC RULES COMMITTEE NO. 40-91
CLOSED-END FUND COMMITTEE NO. 18-91
RE: SEC PROPOSES AMENDMENTS TO RULES GOVERNING "ROLLUP"
TRANSACTIONS
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The SEC has issued rule proposals aimed at curbing abuses
in limited partnership reorganizations (commonly referred to as
"rollups"). The proposed changes would require enhanced
disclosure on a number of matters concerning any proposed rollup
transaction. The proposal also would require that sponsors give
investors either a minimum of 60 days or the maximum time
provided by state law to consider the rollup. A copy of the SEC
release is attached.
The SEC's proposal, as drafted, would not apply to business
combination transactions involving investment companies (since it
would not amend Form N-14). However, it is important to note
that if the SEC were to impose the proposed requirements on
investment company transactions in the future, all investment
company mergers and similar transactions could be subject to the
requirements by virtue of the broad definition of "partnership"
included in the proposal, which includes any "trust...or other
similar entity that is not an association taxed as a corporation
under subchapter C of the [Internal Revenue Code]."
A copy of the SEC release is attached. The comment period
for the proposal expires on August 9, 1991. Therefore, please
provide me with any comments you have on the proposal for
possible inclusion in the Institute's comment letter by July 31,
1991. My direct number is 202/955-3523.
Amy B.R. Lancellotta
Assistant General Counsel
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