June 16, 1992
TO: UNIT INVESTMENT TRUST COMMITTEE NO. 32-92
RE: INSTITUTE RESPONDS TO SEC STAFF LETTER PROPOSING REVISIONS
TO ELTR FORMULA
As you know, the Institute recently received a letter from
the staff of the Division of Investment Management proposing
certain changes to the Institute’s proposed estimated long-term
return formula for unit investment trusts. (See Memorandum to
Unit Investment Trust Committee No. 22-92, dated April 15, 1992.)
A draft response previously was circulated to you.
The Institute’s response, a copy of which is attached,
expresses concern about and disagreement with the approach taken
by the staff’s proposed modifications, which would result in
disparate treatment of unit investment trusts and mutual funds.
The letter reiterates the Institute’s reasons for selecting a
measure of long-term performance for unit investment trusts that
is based upon the mutual fund yield formula. It expresses the
Institute’s position that the similarities of these two competing
investment products present a compelling basis for similar
treatment in the context of devising a method of computing long-
term performance.
We will keep you informed of developments.
Frances M. Stadler
Assistant Counsel
Attachment