December 17, 1991
TO: BOARD OF GOVERNORS NO. 89-91
CONTRACTUAL PLANS COMMITTEE NO. 20-91
STATE LIAISON COMMITTEE NO. 23-91
RE: NASAA RESPONDS TO INSTITUTE LETTER ON MUTUAL FUND INVESTOR
ALERT
__________________________________________________________
As we previously advised you, the North American Securities
Administrators Association ("NASAA") and the Council of Better
Business Bureaus ("CBBB") jointly issued an Investor Alert
regarding mutual funds. The Institute submitted a letter to
NASAA strongly objecting to the overall tone and several of the
specific allegations regarding mutual funds contained in the
Investor Alert. (See Memorandum to Board of Governors No. 87-91,
State Securities Members No. 53-91 and Contractual Plans
Committee No. 19-91, dated December 10, 1991.)
The Institute received a response to its letter from the
President of NASAA which states that the NASAA Corporate Office
has been instructed to distribute the Institute's letter to all
NASAA administrators. According to the letter, the Alert was not
intended to cast "unfounded aspersions on investment companies as
a group." Rather, it was intended to provide general information
on mutual funds. However, in retrospect, NASAA acknowledged it
may have been appropriate to consult with the Institute on the
Alert prior to its publication. A copy of the NASAA letter is
attached.
The Institute will be scheduling a meeting with the
President of NASAA in the near future to discuss the Investor
Alert as well as other topics of mutual interest. We will keep
you advised of developments.
Patricia Louie
Assistant General Counsel
Attachment