July 30, 1993
TO: BANK INVESTMENT MANAGEMENT MEMBERS NO. 17-93
SEC RULES COMMITTEE NO. 68-93
STATE LIAISON COMMITTEE NO. 30-93
RE: INSTITUTE SUBMITS MEMORANDUM TO NASAA ON BANK SALES OF
MUTUAL FUNDS
__________________________________________________________
Three separate committees of the North American Securities
Administrators Association, Inc. ("NASAA") have initiated studies of the
retail practices of banks that sell mutual funds. Among other issues, it is
the Institute's understanding that the studies will review the adequacy of the
disclosures provided to investors regarding the uninsured nature of mutual
funds and the qualifications of personnel who sell investments.
In order to assist NASAA, and the NASAA Committees involved in the
study, the Institute prepared the attached Memorandum which outlines the
growth of bank sales of mutual funds and the current regulation of sales
practices under both securities and banking laws. The last section of the
Memorandum discusses the Institute's proposed guidelines for bank retail
mutual fund sales activities.
The Institute will monitor the actions of the various committes and keep
you advised of developments.
Patricia Louie
Associate Counsel
Attachment