November 11, 1993
TO: SEC RULES COMMITTEE NO. 104-93
UNIT INVESTMENT TRUST COMMITTEE NO. 56-93
RE: PROPOSED INSTITUTE COMMENT LETTER ON SEC’S PROPOSED
AMENDMENTS TO RULE 485
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As we previously reported, 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 as Rule
486, which would establish procedures for closed-end interval funds similar to
the proposed amendments to Rule 485. (See Memorandum to SEC Rules Committee No.
82-93; Unit Investment Trust Committee No. 46-93, dated September 23, 1993.)
Attached is a draft comment letter from the Institute on the proposals.
The draft letter expresses general support for the proposals because they
would provide greater efficiencies while preserving current investor protections.
In particular, the letter expresses support for the proposed expansion of the
purposes for which a B-Amendment could be filed and the reproposal of Rule 485a
as Rule 486.
However, the letter expresses strong opposition to the proposal to prevent
the use of Rule 485 in the case of an amendment adding a series to an open-end
management investment company. The letter emphasizes that such a dramatic
departure from the carefully-crafted review process in Rule 485 would create
significant delays in the introduction of new portfolios and would impose
substantial costs on mutual funds and their shareholders, without providing
investors with any meaningful new protection.
The letter also urges the Commission to expand the list in Rule 485(b) of
permissible purposes for a B-Amendment, to include amendments that are
accompanied by a representation that the only changes being made are
substantially similar to those in a previous filing. (The Commission’s proposal
would amend Rule 485(b) to allow certain types of post-effective amendments not
otherwise eligible for automatic effectiveness under paragraph (b) to become
effective automatically, but only by the Commission upon a registrant’s request.)
Comments are due on the proposed amendments on November 26, 1993. Please
provide me with your comments on the Institute’s draft letter by Friday, November
19, 1993. My direct number is 202/955-6251 and the fax number is 202/659-1519.
Thomas M. Selman
Assistant Counsel
Attachment