INSTITUTE TO SEEK INVESTMENT COMPANY/INVESTMENT ADVISER EXEMPTION FROM PUBLIC UTILITY HOLDING COMPANY REGULATION

November 17, 1994 TO: COMPLIANCE COMMITTEE No. 21-94 INVESTMENT ADVISERS COMMITTEE No. 56-94 SEC RULES COMMITTEE No. 121-94 RE: INSTITUTE TO SEEK INVESTMENT COMPANY/INVESTMENT ADVISER EXEMPTION FROM PUBLIC UTILITY HOLDING COMPANY REGULATION _____________________________________________________________________________ The Securities and Exchange Commission has issued a concept release seeking comment on modernization of the regulation of public utility holding companies under the Public Utility Holding Company Act of 1935. The release indicates that the Commission is undertaking a comprehensive study of the Act, which was adopted as part of the New Deal and has remained largely unchanged since its adoption. Among the specific areas upon which comments are requested is application of the Act to investment companies and investment advisers. (This portion of the release is attached.) As you may recall, on two previous occasions, the Institute has recommended that the Commission adopt exemptive rules under the Act with respect to investment companies and investment advisers, but no such action has been taken to date. In light of the explicit request for comments noted above, however, we plan to submit a letter reiterating our proposal. Comments must be filed by February 6, 1995. Attached is a copy of the Institute's 1988 submission to the Division of Investment Management concerning this matter. It may be helpful to include in our next comment letter a discussion of the adverse practical consequences of the current regulatory scheme. Please provide me with information along these lines, or any other comments on the continuing appropriateness of our earlier submission, by Friday, December 16th. I can be reached at (202) 326-5822. Frances M. Stadler Associate Counsel Attachments