October 31, 1994
TO: CLOSED-END FUND COMMITTEE NO. 24-94
INVESTMENT ISSUES COMMITTEE NO. 12-94
SEC RULES COMMITTEE NO. 116-94
UNIT INVESTMENT TRUST COMMITTEE NO. 68-94
RE: SEC ISSUES CONCEPT RELEASE AND NOTICE OF HEARING ON
FORWARD-LOOKING INFORMATION
__________________________________________________________
The Securities and Exchange Commission recently issued a
concept release soliciting comment on the current safe harbor for
the presentation of forward-looking information by issuers, and
on proposals for reform. The Commission also stated that it will
hold a public hearing on February 13, 1995, to consider these
issues.
The comment period ends on January 11, 1995. If you have any
comments on the release, please provide them to the undersigned
by November 21, 1994.
Rule 175 under the Securities Act of 1933 and Rule 3b-6
under the Securities Exchange Act of 1934 offer safe harbor
protection for specified forward-looking statements, unless the
statement was made without a reasonable basis or was disclosed
other than in good faith. The safe harbor does not cover
forward-looking information issued by investment companies.
Among other matters, the Commission's release requested
comment on whether "the forward-looking information that might be
disclosed by registered investment companies, i.e., projections
of fund performance," are "inappropriate for the protection of
the safe harbor." The Commission also asked whether distinctions
should be made according to the type of investment company and
how this information would be revised or updated.
The concept release also described various proposals to
reform the safe harbor with respect to corporate issuers. These
include a "seasoned issuer" proposal for a safe harbor with
respect to forward-looking statements concerning NASDAQ or
exchange-listed securities; a "business judgement rule proposal"
that would provide protection along the lines of the state
business judgment rule; and a "heightened definition" proposal
that would protect forward-looking statements unless they contain
material misstatements or omissions, made or omitted with
scienter, and are relied upon by private plaintiffs.
Thomas M. Selman
Associate Counsel
Attachment