* See Memorandum to Advertising Subcommittee No. 32-96 and SEC Rules Members No. 75-96, dated Dec. 9, 1996.
December 24, 1996
TO: ADVERTISING SUBCOMMITTEE No. 36-96
SEC RULES COMMITTEE No. 136-96
RE: INSTITUTE COMMENT LETTER ON NASD PROPOSAL ON INVESTMENT
COMPANY RANKINGS
______________________________________________________________________________
As we previously informed you, the Securities and Exchange Commission recently
published a rule proposal by the National Association of Securities Dealers, Inc. that revises the
ranking guidelines for use in investment company advertisements.* The proposal would allow
NASD members to use rankings (other than those for money market funds) that represent
short, medium and long term performance of a mutual fund, provided that rankings for one,
five and ten year time periods for the fund are unavailable, and to use rankings based on a
funds yield based on a period of less than one year. The Institute today submitted the attached
comment letter to the SEC, which strongly supports the proposal and makes two minor
comments with respect to the language of SECs release.
Alexander C. Gavis
Assistant Counsel
Attachment