June 10, 1996
TO: CLOSED-END FUND COMMITTEE No. 15-96
SEC RULES COMMITTEE No. 56-96
RE: SEC PROPOSALS ON DISCLOSURE SIMPLIFICATION
______________________________________________________________________________
The Securities and Exchange Commission recently issued the attached rulemaking
proposals that would implement certain recommendations of the SECs Task Force on
Disclosure Simplification. The Task Force, which was formed by the SEC in early 1996, recently
published a report containing numerous recommendations to simplify the registration and
reporting process for corporate issuers. One of the proposed changes would apply to all
investment companies and another would apply only to closed-end investment companies.
With respect to all investment companies, the SEC has proposed to amend Rule 497(f)
under the Securities Act of 1933, which requires that investment company prospectuses
consisting of a radio or television broadcast be reduced to writing and be filed at least five days
before they are broadcast. The amendment would retain the requirement that such
prospectuses be reduced to writing, but would eliminate the five day pre-broadcast filing
requirement. It is proposed that such prospectuses be filed with the SEC any time prior to use,
in accordance with Rule 497(e) of the Securities Act. (See pp. 22-24)
With respect to closed-end investment companies, the SEC proposal would eliminate
the requirement that issuers with securities listed on an exchange file two forms, one to register
their shares under the Securities Act and another to register their shares under the Securities
Exchange Act of 1934. To implement this change, the SEC has proposed to amend Form N-2 to
provide for concurrent registration of issuers shares under the Securities Act and the Exchange
Act. (See pp. 15-20) Among other things, comment is requested on whether issuers would find
the concurrent registration procedure to be useful.
The SEC solicits comments on the proposals within 45 days after their publication in the
Federal Register. If there are any comments that you would like the Institute to include in a
comment letter, please contact the undersigned (at 202/326-5923) or Dorothy Donohue (at
202/326-5821), concerning the change affecting closed-end funds, by July 1, 1996.
Alexander C. Gavis
Assistant Counsel
Attachment