October 6, 1993
TO: SEC RULES COMMITTEE NO. 87-93
STATE LIAISON COMMITTEE NO. 46-93
UNIT INVESTMENT TRUST COMMITTEE NO. 49-93
RE: MISSOURI PROPOSES NEW REGISTRATION PROCEDURE FOR INVESTMENT
COMPANIES
__________________________________________________________
The Missouri Securities Commissioner recently issued for public comment a
proposed rule for registration of securities of an investment company. As
currently drafted, Proposed Rule 30-52.160 ("Proposed Rule") would apply to all
investment companies. However, in a discussion with the Commissioner of
Securities, he indicated that the Proposed Rule would be amended to apply only
to open-end investment companies and not to unit investment trusts or closed-end
investment companies. A copy of the Proposed Rule is attached.
If adopted, the procedure set forth in Proposed Rule would be the sole
method to register mutual fund securities in Missouri -- it is not an optional
method. Among other items, the Proposed Rule would require the filing of a
Missouri supplement to the prospectus containing certain specified information.
The supplement must set forth the investment objective and investment strategies
of the fund, the past performance (if applicable) or a prominent statement that
the fund has no operating history, the major holdings of the fund by company, a
risk/reward analysis, an expense table, and the toll-free number of the Missouri
Securities Division. This supplement will be required to be provided to each
prospective Missouri investor.
The Proposed Rule provides that upon the filing of the requisite
information, a registration statement will be declared effective fifteen days
after filing, or upon SEC effectiveness. Upon request of the Securities
Division, a registrant must submit within twenty days of the request, copies of
all sales materials (including internal sales material) used in Missouri, the
names addresses, dates and amounts of investment for all Missouri investors, and
any other information requested by the Commissioner of Securities. The
Securities Division believes that compliance with this proposal will not cost
mutual funds more than $500 in the aggregate to comply with.
In past meetings and conversations with the Commissioner of Securities, the
Institute expressed serious concerns with respect to this proposed registration
procedure (which had been described as an optional procedure) and noted that it
would be extremely costly for mutual funds to prepare a separate disclosure
document for Missouri and to provide the shareholder information to the Division.
In order to prepare our comments on the Proposed Rule, please provide us with the
following information:
(1) cost estimates which would be incurred to prepare a separate
Missouri supplement;
(2) cost estimates which would be incurred to comply with the Proposed
Rule, including staff costs for monitoring compliance with the
Proposed Rule and preparing and submitting the Missouri shareholder
information; and
(3) whether or not funds will continue to register in Missouri as a
result of this proposal.
Comments on the Proposed Rule must be received by the Commissioner within
thirty days after publication of the Proposed Rule in the Missouri Register.
However, since it is unknown when the Proposed Rule will actually be published
in the Missouri Register, the Commissioner of Securities has stated that comments
should be submitted no later than November 5, 1993. In order to incorporate the
above information and any other comments you wish to be included in the
Institute’s comment letter, please provide me with the foregoing information by
Monday, October 25, 1993. My direct telephone number is 202/955-3517 or you may
fax your comments to me at 202/659-1519.
We will keep you advised of developments.
Patricia Louie
Associate Counsel
Attachment