February 10, 1992
TO: SUBCOMMITTEE ON ADVERTISING NO. 3-92
1990s AD HOC COMMITTEE
RE: NASD RESPONSE TO INSTITUTE LETTER ON RULE 482 LIABILITY
__________________________________________________________
As we previously informed you, the Institute recently
submitted a letter to the NASD in response to their request for
the Institute's views on liability for Rule 482 advertisements.
(See Memorandum to Subcommittee on Advertising No. 1-92 and 1990s
Ad Hoc Committee, dated January 7, 1992.) The request was made
in response to an earlier Institute submission to the NASD,
requesting that they support changes to the federal securities
laws that would eliminate the "substance of which" requirement
for such advertisements. In its letter, the Institute stated
that it did not believe it was necessary to remove Rule 482 ads
from the scope of prospectus liability in connection with changes
that would remove the "substance of which" requirement.
Attached is a copy of the NASD's acknowledgement of the
Institute's letter. The letter indicates that, in light of the
Institute's position on liability, the Investment Companies
Committee of the NASD endorses the Institute's proposal.
We will keep you advised of developments.
Craig S. Tyle
Deputy General Counsel
Attachment