February 15, 1996
TO: BOARD OF GOVERNORS No. 8-96
MEMBERS - ONE PER COMPLEX No. 14-96
RE: IMMEDIATE ACTION ITEM
______________________________________________________________________________
** LEGISLATIVE ALERT **
Write Congress NOW to Eliminate Duplicative State Regulation of Mutual Funds:
House Subcommittee Action Scheduled for March 7-8
On March 7 and 8, the House Subcommittee on Telecommunications and Finance will
formally act on legislation to amend the Investment Company Act of 1940 (H.R. 1495). There is
broad bipartisan support for legislative proposals (not yet contained in H.R. 1495) that would
eliminate duplicative state regulation of mutual funds. We are asking you to contact Members
of the Commerce Committee immediately to urge them to include language in H.R. 1495
that provides for the elimination of duplicative state regulation governing the mutual fund
industry.
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Letters to Members of the Committee should be in your own words. You might begin by
identifying your firm (e.g., number of funds, employees, shareholders, assets, etc.) The
following arguments can be used to support the elimination of duplicative state regulation of
mutual funds:
Mutual funds are the most strictly regulated segment of the securities industry; they are
subject to all of the major federal securities statutes--not only the Investment Company Act
of 1940 that would be revised by this bill--but also the Securities Act of 1933, the Securities
Exchange Act of 1934, and the Investment Advisers Act of 1940. The Acts are enforced
uniformly, on a nationwide basis, by the SEC.
But in addition to this extensive regime of federal regulation, mutual funds are subject to an
array of disparate requirements imposed by state governments. This "patchwork" of state
regulation unnecessarily duplicates federal regulation, produces conflicts and
inconsistencies, and frustrates uniform national regulatory policy.
Because mutual funds are sold nationally, mutual funds must comply with the laws of all 50
states. Thus, any single state can dictate policy for mutual fund shareholders throughout
the nation--and a minority of "activist" states regularly do so.
This is contrary to the interests of mutual fund shareholders:
* It undermines SEC initiatives to improve investor protection;
* It helps produce prospectuses that are lengthy, complex and difficult to
comprehend; and
* It hinders innovation in fund products and services permitted by federal law.
The current system diverts scarce state government resources from higher priorities, such as
investigating customer complaints and addressing fraud and abuse.
Under pending legislative proposals, existing state enforcement powers and the ability of
states to receive notice filings and collect fees from mutual funds would be fully preserved;
but mutual fund prospectuses, advertising and fund portfolio investments would be
exclusively regulated by the SEC under federal law.
_______________________________
The attachment lists members of the House Commerce Committee, with contact
information. All letters should be sent as soon as possible.
Please write all Members of the Committee who represent states in which your company
has an office and emphasize your presence in their state. Please copy these letters to: 1)
Commerce Committee Chairman Thomas Bliley (R-VA); 2) Ranking Minority Member John
Dingell (D-MI); 3) Subcommittee Chairman Jack Fields (R-TX); and (4) Ranking Minority
Member Edward Markey (D-MA).
If none of the members of the Committee are from your state, write directly to
Subcommittee Chairman Jack Fields (R-TX) and Ranking Minority Member Edward
Markey (D-MA) and send copies to: 1) Committee Chairman Thomas Bliley (R-VA); and 2)
Ranking Minority Member John Dingell (D-MI).
Please send a blind copy of your letters to the attention of Julie Domenick (202/326-5890)
or Don Morrissey (202/326-5895); fax number: 202/326-5899.
Thank you very much for your assistance.
Matthew P. Fink
President
Attachment
HOUSE COMMERCE COMMITTEE MEMBERS
All letters should be addressed to: The Honorable ; Building; U. S. House
of Representatives; Washington, D. C. 20515
Committee Chairman VA 2241 Rayburn Bldg. 202/225-0011
Committee Ranking MI 2328 Rayburn Bldg. 202/225-4637
Subcommittee TX 2228 Rayburn Bldg. 202/225-2772
Subcommittee MA 2133 Rayburn Bldg. 202/225-1716
Blanche Lincoln AR 1204 Longworth Bldg. 202/225-4654
Brian Bilbray CA 1004 Longworth Bldg. 202/225-2948 bilbray@hr.house.gov
Christopher Cox CA 2402 Rayburn Bldg. 202/225-9177
Carlos Moorhead CA 2346 Rayburn Bldg. 202/226-1279
Anna Eshoo CA 308 Cannon Bldg. 202/225-8890 anngram@hr.house.gov
Henry Waxman CA 2408 Rayburn Bldg. 202/225-4099
Dan Schaefer CO 2353 Rayburn Bldg. 202/225-7885 schaefer@hr.house.gov
Gary Franks CT 133 Cannon Bldg. 202/225-5085
Michael Bilirakis FL 2240 Rayburn Bldg. 202/225-4085 truerep@hr.house.gov
Cliff Stearns FL 2352 Rayburn Bldg. 202/225-3973 cstearns@hr.house.gov
Peter Deutsch FL 204 Cannon Bldg. 202/225-8456 pdeutsch@hr.house.gov
Nathan Deal GA 1406 Longworth Bldg. 202/225-8272
Charlie Norwood GA 1707 Longworth Bldg. 202/225-3397 ga10@hr.house.gov
Greg Ganske IA 1108 Longworth Bldg. 202/225-3193
Michael Crapo ID 437 Cannon Bldg. 202/225-8216
Dennis Hastert IL 2453 Rayburn Bldg. 202/225-0697 dhastert@hr.house.gov
Cardiss Collins IL 2308 Rayburn Bldg. 202/225-8396
Bobby Rush IL 131 Cannon Bldg. 202/226-0333
Edward Whitfield KY 1541 Longworth Bldg. 202/225-3547
W.J. Tauzin LA 2183 Rayburn Bldg. 202/225-0563
Gerry Studds MA 237 Cannon Bldg. 202/225-2212
Fred Upton MI 2333 Rayburn Bldg. 202/225-4986
Bart Stupak MI 317 Cannon Bldg. 202/225-4744
Richard Burr NC 1431 Longworth Bldg. 202/225-2995 mail2nc5@hr.house.gov
Frank Pallone NJ 420 Cannon Bldg. 202/225-9665
Bill Richardson NM 2209 Rayburn Bldg. 202/22506190
Daniel Frisa NY 1529 Longworth Bldg. 202/225-3187
Bill Paxon NY 2436 Rayburn Bldg. 202/225-5910 bpaxon@hr.house.gov
Thomas Manton NY 2235 Rayburn Bldg. 202/225-1909 tmanton@hr.house.gov
Edolphus Towns NY 2232 Rayburn Bldg. 202/225-1018
Paul Gillmor OH 1203 Longworth Bldg. 202/225-1985
Michael Oxley OH 2233 Rayburn Bldg. 202/226-1160 oxley@hr.house.gov
Sherrod Brown OH 1019 Longworth Bldg. 202/225-2266
Tom Coburn OK 511 Cannon Bldg. 202/225-3038
Elizabeth Furse OR 316 Cannon Bldg. 202/225-9497 furseor1@hr.house.gov
James Greenwood PA 430 Cannon Bldg. 202/225-9511
Ron Klink PA 125 Cannon Bldg. 202/226-2274
Bart Gordon TN 2201 Rayburn Bldg. 202/225-6887
Joe Barton TX 2264 Rayburn Bldg. 202/225-3052 barton06@hr.house.gov
John Bryant TX 2330 Rayburn Bldg. 202/225-0327
Ralph Hall TX 2236 Rayburn Bldg. 202/225-3332
Rick Boucher VA 2245 Rayburn Bldg. 202/225-0442 ninthnet@hr.house.gov
Rick White WA 116 Cannon Bldg. 202/225-3524 repwhite@hr.house.gov
Scott Klug WI 1113 Longworth Bldg. 202/225-6942 badger02@hr.house.gov