January 23, 1992
TO: SUBCOMMITTEE ON ADVERTISING NO. 2-92
RE: INSTITUTE COMMENT LETTER ON NASD PROPOSAL TO RESCIND
GUIDELINES
__________________________________________________________
As we previously informed you, the NASD has proposed to
rescind its "Guidelines Regarding Communications with the Public
about Investment Companies and Variable Contracts" and to
incorporate certain parts of the Guidelines into Article III,
Section 35 of the NASD's Rules of Fair Practice, which governs
communications with the public. (See Memorandum to Subcommittee
on Advertising No. 8-91, dated December 18, 1991.) Attached is a
copy of the Institute's comment letter on the proposal.
In the comment letter, the Institute expresses general
support for the proposal, provided that its purpose is to rescind
obsolete provisions, and that it does not represent a change in
the NASD's substantive regulation of fund sales literature. In
this regard, the letter requests that this clearly be stated in
the Notice to Members when the matter is submitted for a vote.
The letter also contains specific comments on the proposal.
These include that the section in the Guidelines entitled
"General Considerations", which would be among those rescinded
under the proposal, be retained in some form, as well as comments
on the three sections proposed to be incorporated into Section 35
(tax-free claims, comparisons, and projections of future
performance).
We will keep you informed of developments.
Craig S. Tyle
Deputy General Counsel
Attachment