November 14, 1996
TO: INTERNATIONAL COMMITTEE No. 39-96
TAX COMMITTEE No. 34-96
RE: INSTITUTE RESPONDS TO IOSCO CROSS-BORDER MARKETING SURVEY
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IOSCO Working Party 5 has initiated a project dealing with cross-border marketing of
mutual fund shares and investment management services. In connection with this initiative,
the Institute was asked to respond to a questionnaire designed to identify the US investment
management industry’s interest in distributing products and services in foreign markets and to
illustrate the difficulties in cross-border activities. See Memorandum to International
Committee No. 22-96, dated July 10, 1996.
Attached is a copy of the Institute’s response to the IOSCO Working Party 5
questionnaire. The response urges IOSCO to take into account two important points. First,
whether cross-border activity is possible often depends on tax laws and whether access to local
distribution channels is available. In this regard, the Institute included a memorandum that
discusses the tax considerations in greater detail and provides a country-specific analysis of tax
considerations with respect to the twelve member countries of Working Party 5. Second, in
considering whether cross-border marketing of funds and services is possible under securities
regulations, the analysis should focus on whether the regulatory regime, as a whole and in light
of its core objectives, affords effective market access to foreign firms. In the Institute’s view, the
US regulatory regime meets this test.
We will keep you informed of further developments.
Mary S. Podesta Keith Lawson
Associate Counsel - International Associate Counsel - Tax
Attachment