VIA FAX
September 2, 1994
TO: ACCOUNTING/TREASURERS COMMITTEE NO. 45-94
TAX COMMITTEE NO. 29-94
RE: SEPTEMBER 13 MEETING TO DISCUSS IRS RULINGS ON MULTI-CLASS
ARRANGEMENTS
__________________________________________________________
For may years, it has been a common practice for mutual
funds adopting a multi-class structure to obtain a letter ruling
from the IRS to the effect that adopting the structure will not
cause adverse tax consequences for the fund or its shareholders.
To obtain a ruling, a fund must make certain representations
concerning the proposed structure and its operation. A working
group at the IRS is drafting a sample set of representations that
each fund seeking a ruling concerning a multi-class arrangement
would be required to make as a condition of receiving a ruling.
We understand that the IRS recently stated that funds must
make the following representation concerning the differences
between the distributions to be made on the different classes of
shares in the funds:
"The sum of the annual distributions per share of
each class of a fund and the annual amounts per share
paid by the fund for shareholders of that class will
differ from the sum of the annual distributions per
share of each other class of that fund and the annual
amounts per share paid by the fund for the shareholders
of the other class by less than 50 basis points of the
average NAV per share of the class with the smallest
NAV per share. The annual amounts per share paid by
the fund for the shareholders of a class include
only..."
A number of members have expressed concerns about this
representation.
The Institute has scheduled a meeting to discuss the
representations being requested by the IRS and to address any
problems they may cause. Please be prepared to discuss any
representations the IRS has requested during its recent
consideration of ruling requests dealing with multi-class
arrangements and any concerns you have regarding the
representations. The meeting will be held at the Institute's
offices at 1401 H Street, N.W., Washington, D.C., beginning at
2:00 p.m. Lunch will be available before the meeting.
Please indicate on the attached form if you plan to attend.
Peter Cinquegrani
Assistant Counsel - Tax
Attachment
Please fax this portion to Theresa Brice, Investment Company
Institute, 202-326-3841.
Meeting to Discuss Multi-Class Ruling Process
2:00 p.m., Tuesday
September 13, 1994
Investment Company Institute
I (We) plan to attend the meeting
Check here if you wish to have lunch G
ATTENDEE (S)
COMPANY NAME