January 3, 1992
TO: YIELD ENHANCEMENT TASK FORCE NO. 1-92
RE: MEETING TO FINALIZE RECOMMENDED ENHANCEMENT DISCLOSURE
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The next meeting of the Institute's Yield Enhancement Task
Force has been scheduled for Thursday, January 23 at 10:00 a.m.
The meeting will be held at the Institute. At the meeting, the
Task Force will consider the proposed disclosure of enhancement
techniques as approved at the last meeting of the Task Force on
December 3.
At the December 3 meeting, it was agreed that, in light of
the recent NASD Notice to Members discussing the obligation to
disclose the effects of interest rates on prices of shares of
bond funds in the context of sales to holders of maturing CD's,
the Task Force should not recommend any further disclosure
requirements in this area. With respect to disclosures of
distribution enhancing techniques, the Task Force recommended
broadening the scope of fund practices that would require
disclosure, so that all distribution and accounting policies that
can be expected to result in distributions to shareholders
materially in excess of what they otherwise would have been would
be covered. (This is set forth in greater detail in the attached
memorandum.)
At the next meeting, we plan to finalize the substance of
the recommended disclosure, as well as decide how to implement it
(e.g., through amendments to Form N-1A, an SEC interpretation, or
simply an NASD Notice to Members). Please call Kathleeen Volpe
at 202/955-8418 if you plan to attend.
Craig S. Tyle
Deputy General Counsel
Attachment