October 29, 1993
TO: SEC RULES COMMITTEE NO. 97-93
STATE LIAISON COMMITTEE NO. 50-93
UNIT INVESTMENT TRUST COMMITTEE NO. 52-93
RE: INSTITUTE COMMENTS ON PROPOSED MISSOURI REGISTRATION
PROCEDURE
__________________________________________________________
As you know, the Missouri Securities Commissioner issued for public comment
a proposed rule for registration of securities of an investment company that
would require, among other items, the delivery of a Missouri supplement
containing certain specified information to prospective Missouri investors. (See
Memorandum to SEC Rules Committee No. 87-93, State Liaison Committee No. 46-93
and Unit Investment Trust Committee No. 49-93, dated October 6, 1993.) The
Institute submitted the attached comment letter, which focuses solely on the
impact the proposed rule would have on mutual funds since the Commissioner
indicated that the proposal would not apply to closed-end funds or unit
investment trusts.
In its comment letter, the Institute stated that the proposal would be
counterproductive and extremely burdensome and costly to mutual funds and their
shareholders. The letter further stated that the proposal could not be justified
and should be withdrawn for the following reasons:
- mandating the delivery of a proposed Missouri supplement to
investors appears to be beyond the scope of the Commissioner’s
authority;
- the proposed Missouri supplement represents a radical departure from
existing state practice;
- the proposed Missouri supplement is inconsistent with the SEC’s
summary prospectus proposal and is entirely premature;
- several of the disclosure items contained in the proposed Missouri
supplement are not material to an investment decision and may, in
fact, be misleading;
- the proposed Missouri supplement will not streamline or simplify the
information provided to investors;
- the proposal is ambiguous as to when the Missouri supplement would
be required to be delivered; and
- compliance with the proposal would be extremely burdensome and
costly to mutual funds and their shareholders.
The Institute will be scheduling a meeting with the Missouri Securities
Commissioner to further discuss the proposed rule’s impact on the mutual fund
industry. We will keep you advised of developments.
Patricia Louie
Associate Counsel
Attachment