September 6, 1996
TO: SEC RULES COMMITTEE No. 95-96
STATE LIAISON COMMITTEE No. 24-96
UNIT INVESTMENT TRUST COMMITTEE No. 37-96
RE: OHIO PROPOSES REPEAL OF RULE IMPOSING INCONSISTENT
INVESTMENT LIMITATIONS
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Ohio has published for comment proposed amendments to Rule 1301:6-3-09 that would
repeal Ohios investment limitations and other provisions governing the operations of
investment companies, which are inconsistent with federal law. In lieu thereof, the Ohio
Division of Securities has proposed adoption of the NASAA Guidelines relating to junk bonds,
master/feeder funds, periodic payment plans, and telephone transactions. Rather than
incorporating such Guidelines by reference, however, they have been set out in their entirety in
the proposal as paragraphs (F), (G), (H), and (I), respectively. The definitional sections from
each of these Guidelines are set forth in paragraph (D)(1) of the proposed rule. Additionally,
Paragraph (J)(2) would be created in Rule 1301:6-3-09 to require an investment company to
include with its renewal application, "a written commitment by the fund to continue to comply
with [Rule 1301:6-3-09]."
Notwithstanding the pendency of the federal legislation that would preempt state
registration of mutual funds, including the imposition of any unique investment limitations or
disclosure requirements, the Institute strongly encourages its members to write to the Ohio
Division of Securities expressing support for the repeal of Ohios inconsistent provisions. If
you have any concerns about provisions in the NASAA Guidelines, they should be raised in
your comment letter.
Comments on the proposal are due no later than October 16, 1996 and should be
submitted to Thomas Geyer, Acting Commissioner, Ohio Division of Securities, 77 South High
Street, Columbus, Ohio 43215.
A copy of the Divisions proposal is attached.
Tamara K. Cain
Assistant Counsel
Attachment