April 28, 1992
TO: STATE SECURITIES MEMBERS NO. 19-92
SEC RULES COMMITTEE NO. 24-92
RE: INSTITUTE REQUESTS REPEAL OF STATE INVESTMENT RESTRICTIONS
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The Institute recently wrote the securities administrators
of Arkansas, Indiana and Wisconsin to request that the securities
division suspend or repeal application of the state investment
restrictions on open-end investment companies.
The Institute expressed concern that due to changing market
conditions, industry technology and innovation, several of the
investment limitations imposed by these states are inconsistent
with those permitted on the federal level. In particular, the
Institute requested that the investment restrictions pertaining
to investment in illiquid assets be amended in light of the SEC's
recent amendment to the Guidelines to Form N-1A. This amendment,
which became effective on March 20, 1992, permits mutual funds to
increase from 10% to 15% the amount of illiquid assets they may
hold. The Institute also requested Arkansas and Indiana to
repeal or revise the investment limitation in restricted
securities to permit the investment in Rule 144A securities by a
mutual fund.
A copy of the Institute's letter to each of these states is
attached. We will also be contacting Missouri, Ohio and South
Dakota to request similar relief. We will keep you advised of
developments.
Patricia Louie
Assistant General Counsel
Attachments