June 15, 1992
TO: SEC RULES COMMITTEE NO. 41-92
STATE LIAISON COMMITTEE NO. 22-92
INSTITUTIONAL FUNDS COMMITTEE NO. 12-92
RE: NASAA ISSUES PROPOSED POLICY STATEMENT FOR "TWO-TIER"
FUNDS
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The NASAA Investment Company Registration/Trading Practices
Committee has been reviewing the disclosure guidelines the
Committee drafted for two-tier funds (e.g. "hub and spoke" funds)
which several states have been using in reviewing the
applications for registration of these types of funds. The
Institute has submitted two comment letters to the Committee with
respect to certain of the items included in the disclosure
guidelines. The SEC also submitted a memorandum to the Committee
detailing the review of two-tier funds by the SEC. The SEC
memorandum also sets forth specific comments regarding the
Committee disclosure guidelines.
As a result of the comments submitted by the Institute and
SEC, the NASAA Committee revised the disclosure guidelines and
issued the attached "Proposed Guidelines for the Registration of
Master Fund/Feeder Funds" for public comment. The Proposed
Guidelines incorporate several of the comments recommended by the
SEC and the Institute and are a significant improvement over the
initial disclosure guidelines. In particular, the Proposed
Guidelines require narrative disclosure following the fee table
which summarizes the expenses of the Portfolio and first-tier
fund rather than a separate fee table for both funds as
originally proposed by the Committee. The Proposed Guidelines
also set forth certain areas where specialized disclosure may be
appropriate.
* * *
Public comments are due on or before August 1, 1992 and
should be mailed to Diane Young-Spitzer, Associate Director and
General Counsel, Securities Division, J.W. McCormack Building,
17th Floor, Boston, Massachusetts 02108. Please call me at (202)
955-3517 with any comments you would like included in the
Institute’s letter by Friday, June 17, 1992.
Patricia Louie
Assistant Counsel
Attachment