September 23, 1993
TO: CLOSED-END FUND COMMITTEE NO. 22-93
SEC RULES COMMITTEE NO. 82-93
UNIT INVESTMENT TRUST COMMITTEE NO. 46-93
RE: SEC PROPOSES AMENDMENTS TO PROCEDURES FOR FILING POST-
EFFECTIVE AMENDMENTS
__________________________________________________________
The Securities and Exchange Commission has proposed amendments to Rule 485
under the Securities Act of 1933 under which mutual funds and unit investment
trusts file post-effective amendments to their registration statements. In
addition, the SEC has reproposed Rule 485a, which would establish procedures for
closed-end interval funds similar to the proposed amendments to Rule 485. The
proposed amendments are intended to simplify the operation of the current filing
procedures and expand the conditions under which post-effective amendments are
permitted to become effective automatically.
Set forth below is a brief summary of the proposed amendments.
Paragraph (b) of Rule 485
The SEC has proposed to expand the purposes for which a post-effective
amendment under paragraph (b) of Rule 485 ("B-Amendments") could be filed. Under
the amendments, a fund could file a B-Amendment to make non-material changes in
its registration statement, regardless of whether the amendment is filed in
conjunction with the annual update, and to include or update the investment
performance information required by recently adopted Item 5A of Form N-1A. The
SEC has solicited comment on whether there are additional purposes for which
automatic effectiveness should be provided under paragraph (b).
In addition, the SEC has proposed to delete the list of events in paragraph
(b)(2) that preclude the filing of a B-Amendment (e.g., termination of an
investment advisory contract), since they presumably would result in material
changes to the registration statement.
The SEC also has proposed an amendment to paragraph (b) that would provide
the SEC with discretionary authority to permit certain types of post-effective
amendments not otherwise eligible for automatic effectiveness to become effective
automatically without staff review. (For example, a change in federal tax law
may result in the need for similar changes in all fund registration statements
that, while material, may not raise the types of disclosure issues that require
staff review.)
Under the proposed amendments, a fund would be permitted to use a B-
Amendment to delay for up to 30 days the effective date of a previously filed
amendment under Rule 485(a). The effect of this amendment would be to permit
funds to file amendments under paragraph (a) up to 110 days prior to the required
effective date, rather than 60 to 80 days as is currently permitted.
Compliance with N-SAR Filing Requirements
The SEC has proposed that use of paragraph (b) of Rule 485 be conditioned
upon a fund’s having on file with the SEC a current report on Form N-SAR. In
addition, the SEC has proposed amendments to the instructions to Form N-SAR to
set forth procedures for addressing a failure to file in the event one or more
filings have been missed.
Compliance with the Conditions Under Paragraph (b)
Under the proposed amendments, a new paragraph would be added to Rule 485
under which the SEC may suspend the ability of a fund to use paragraph (b) if a
fund designates an amendment as a B-Amendment when it is not eligible to use that
paragraph.
Post-Effective Amendments Adding Series
The SEC has proposed to add a new paragraph to Rule 485 to prevent the use
of that Rule for an amendment that adds a series to an open-end management fund.
Thus, a post-effective amendment that adds a new series would become effective
only when the staff declares it effective pursuant to delegated authority.
Closed-End Interval Funds
The SEC previously had proposed a rule similar to Rule 485, proposed Rule
485a, for closed-end interval unds. The SEC has redesignated proposed Rule 485a
as Rule 486 and is reproposing the Rule to reflect the amendments proposed to
Rule 485.
* * *
A copy of the SEC release is attached. Comments are due on the proposed
amendments to the post-effective amendment filing procedures 60 days after they
are published in the Federal Register. Please provide me with your comments on
the proposed amendments by October 22, 1993. My direct number is 202/955-3523
and the fax number is 202/659-1519.
Amy B.R. Lancellotta
Associate Counsel
Attachment