January 7, 1992
TO: SUBCOMMITTEE ON ADVERTISING NO. 1-92
1990 AD HOC COMMITTEE
RE: INSTITUTE LETTER ON RULE 482 LIABILITY
__________________________________________________________
As we previously informed you, the NASD requested that the
Institute provide a formal statement of its position on the issue
of liability for Rule 482 advertisements in connection with
proposed changes to the securities laws to drop the requirement
that the contents of Rule 482 ads be limited to information the
"substance of which" appears in the statutory prospectus. (See
Memorandum to Subcommittee on Advertising No. 7-91 and 1990s Ad
Hoc Committee, dated December 10, 1991.)
Attached is a copy of the Institute's response to the NASD.
In the letter, the Institute states that it does not believe that
it is necessary to remove Rule 482 advertisements from the scope
of prospectus liability in connection with the removal of the
"substance of which" requirement. However, the letter states
that advertisements whose contents are limited to that allowed
under Rule 134 should continue to not be treated as prospectuses
for liability purposes.
We will keep you informed of developments.
Craig S. Tyle
Deputy General Counsel
Attachment