September 26, 1994
TO: CONTRACTUAL PLANS COMMITTEE NO. 12-94
INVESTMENT ADVISERS COMMITTEE NO. 52-94
STATE LIAISON COMMITTEE NO. 53-94
UNIT INVESTMENT TRUST COMMITTEE NO. 62-94
RE: INSTITUTE SUBMITS COMMENT LETTER ON WISCONSIN
ADMINISTRATIVE RULE PROPOSAL
__________________________________________________________
As we previously informed you, the Office of the Wisconsin
Securities Commissioner (the "Commissioner") recently issued for
public comment proposed amendments to the Commissioner's
Administrative Rules, which would, among other things, create an
exclusion from the existing merit and disclosure requirements for
certain qualified mutual funds. (See Memorandum to Contractual
Plans Committee No. 11-94, State Liaison Committee No. 43-94, and
Unit Investment Trust Committee No. 54-94, dated August 12, 1994
and to Investment Advisers Committee No. 44-94, dated August 16,
1994.) Attached is a copy of the comment letter the Institute
submitted on the Commissioner's proposal.
The Institute's letter expresses strong support for and
urges the adoption of the proposed amendments to Rule 3.09, which
would limit the applicability of certain merit and disclosure
requirements to those investment companies that do not meet
specified experience requirements, and to Rule 3.23, which would
provide that mutual fund prospectuses that meet federal
requirements would satisfy the requirement under state law that
such prospectuses include disclosure "of all material facts."
The Institute recommends, however, that the Commissioner clarify
that, upon adoption of the proposed amendments to Rule 3.23,
mutual fund prospectuses that meet the requirements of Form N-1A
will no longer be subject to a separate disclosure review by the
Commissioner's staff.
The Institute's letter opposes adoption of a proposed
amendment that would have the effect of prohibiting the sale of
contractual plans in Wisconsin. The Institute's letter states
that such prohibition would be premature inasmuch as (1) such
plans have only been permitted to be offered in Wisconsin since
approximately 1992, (2) it was only recently that a plan was
registered for sale by the Commissioner's Office, and (3) there
has been insufficient time for the Commissioner to assess such
plans and their persistency rate.
Finally, the Institute's letter expresses support for
miscellaneous amendments in the proposal that would: (1) provide
a registration exemption for resales by a unit investment trust
sponsor of shares of beneficial interest in the trust that were
acquired by the sponsor in the secondary market; (2) impose
conditions on broker-dealers conducting business on the premises
of a financial institution, which conditions are compatible with
guidelines issued within the last year by the various federal
agencies that regulate financial institutions; (3) permit the use
of negative response letters that are in conformance with the
Rules of Fair Practice of the National Association of Securities
Dealers; and (4) provide for disclosure of specified fee
information in connection with wrap fee programs.
In addition to submitting the attached comment letter, the
Institute plans to provide oral and written testimony in support
of the proposed amendments during the public hearing to be held
on this matter on September 27, 1994.
Tamara K. Cain
Assistant Counsel
Attachment