LETTER FROM CHAIRMEN DINGELL AND MARKEY TO OCC CONCERNING POSSIBLE AMENDMENTS TO COMMON TRUST FUND REGULATION

November 18, 1993 TO: BANK INVESTMENT MANAGEMENT MEMBERS NO. 33-93 BOARD OF GOVERNORS NO. 106-93 INSTITUTIONAL FUNDS COMMITTEE NO. 17-93 RE: LETTER FROM CHAIRMEN DINGELL AND MARKEY TO OCC CONCERNING POSSIBLE AMENDMENTS TO COMMON TRUST FUND REGULATION __________________________________________________________ House Energy and Commerce Committee Chairman John D. Dingell and House Telecommunications and Finance Subcommittee Chairman Edward J. Markey recently wrote a letter to Comptroller of the Currency Eugene A. Ludwig concerning possible amendments to OCC Regulation 9.18, governing common trust funds. A copy of the letter is attached. As you may recall, in 1990 the OCC proposed to amend Regulation 9.18 to permit national banks to advertise their common trust funds to the public; to determine for themselves whether each participating trust account had been established for a bona fide fiduciary purpose; and to charge a fee to the common trust fund in addition to fees already assessed against the beneficiaries. In its recent Regulatory Flexibility Act agenda, the OCC indicated that final action on amendments to Regulation 9.18 is expected in December 1993. In their letter, Chairmen Dingell and Markey state that they "understand [that the proposal] may soon be adopted and published" by the OCC. Their letter urges the Comptroller "to refrain from amending Regulation 9.18 in the manner proposed," in view of current Congressional concerns about bank sales of registered mutual funds. In particular, their letter objects "that as amended Regulation 9.18 -- particularly insofar as it were to permit advertising or double-charging -- would open the way for banks to sell unregistered mutual funds." (Emphasis in original.) The letter characterizes such amendments as "highly counterproductive and potentially quite dangerous." We will keep you informed of further developments. Paul Schott Stevens General Counsel Attachment