INSTITUTE COMMENT LETTER SUPPORTS PROPOSED AMENDMENTS TO REGULATION T CONCERNING INVESTMENT COMPANY SECURITIES

1 See Memorandum to Closed-End Fund Committee No. 31-95, SEC Rules Committee No. 78-95 and Unit Investment Trust Committee No. 52-95, dated June 29, 1995. 2 See Memorandum to Closed-End Fund Committee No. 42-95, SEC Rules Committee No. 94-95 and Unit Investment Trust Committee No. 63-95, dated August 2, 1995. August 28, 1995 TO: CLOSED-END FUND COMMITTEE No. 43-95 SEC RULES COMMITTEE No. 96-95 UNIT INVESTMENT TRUST COMMITTEE No. 67-95 RE: INSTITUTE COMMENT LETTER SUPPORTS PROPOSED AMENDMENTS TO REGULATION T CONCERNING INVESTMENT COMPANY SECURITIES ______________________________________________________________________________ The Institute has filed the attached comment letter with the Federal Reserve Board expressing support for proposed amendments to Regulation T that would liberalize the margin treatment of certain investment company securities.1 The letter is substantially identical to the draft version that recently was circulated to you.2 In summary, it supports the proposals to amend Regulation T to: (1) allow brokers and dealers to give "good faith loan value" to certain investment company securities when extending credit to a customer holding those securities, and (2) treat money market funds as "cash equivalents" that can be used to cover put options written in a customer*s cash account. The letter also recommends several technical changes to the proposed amendments. Frances M. Stadler Associate Counsel Attachment