* See Memorandum to SEC Rules Committee No. 71-97, Accounting/Treasurers Committee No. 19-97 and Unit
Investment Trust Committee No. 47-97, dated July 16, 1997.
[9180]
August 18, 1997
TO: ACCOUNTING/TREASURERS COMMITTEE No. 26-97
SEC RULES COMMITTEE No. 80-97
UNIT INVESTMENT TRUST COMMITTEE No. 53-97
RE: INSTITUTE COMMENT LETTER ON PROPOSED AMENDMENTS TO RULE
24f-2
______________________________________________________________________________
As we previously advised you, the Securities and Exchange Commission recently
proposed amendments to rule 24f-2 and Form 24F-2 under the Investment Company Act of
1940.* Attached is a copy of the Institutes comment letter on the proposal. The Institutes more
significant comments are summarized below.
The letter strongly supports the elements of the proposal that are designed to implement
the National Securities Markets Improvement Act of 1996 and makes several recommendations
regarding Form 24F-2 that are intended to enhance the usefulness of that form. The letter
specifically recommends that the Commission amend the form to clarify that fund shares
previously registered under rule 24e-2 of the Investment Company Act may be used to offset
registration fees that otherwise would be payable in connection with current and future sales of
fund shares. To make this clear, the letter recommends several changes to Item 5 of the form
and suggests adding a note to the form asking funds to identify the number of shares registered
pursuant to rule 24e-2 that were used in the current fiscal year to offset the price of shares sold
pursuant to section 24(f) and the balance of shares registered pursuant to rule 24e-2 remaining
unsold for use in future fiscal years. The letter points out that requiring this information in the
form would assist fund compliance personnel in determining the registration fees that should
be paid to the Commission.
The letter generally supports the exceptions provided by the proposed amendments to
rule 24f-2(b) for certain reorganizations that would permit the successor fund in such
reorganizations to assume any remaining redemption credits of the predecessor fund. The
letter also requests the Commission to modify the proposal to permit an existing stand-alone
fund that purchases the assets of another fund to use the redemption credits of the acquired
fund to offset the successor funds registration fee liabilities.
The letter strongly supports the Commissions proposed elimination of rule 24f-2s
requirement that a funds Form 24F-2 be accompanied by an opinion of counsel and also
suggests eliminating similar requirements in investment company registration forms. The
letter also recommends that the Commission staff adopt a template form that may be used
when filing Form 24F-2 through EDGAR. In addition, the letter recommends that the
Commission amend rule 24f-2 to provide that no unit investment trust is required to file a Form
24F-2 or pay a fee under rule 24f-2 for units sold in the secondary market once primary sales of
units have terminated. Finally, the letter recommends that the Commission permit any mutual
fund, in calculating its registration fees under rule 24f-2, to exclude from the sales price of its
securities any shares sold to a periodic payment plan registered as a UIT, provided that the
mutual fund does not include shares redeemed or repurchased from the periodic payment plan
for purposes of netting sales under rule 24f-2. This change would eliminate duplicative
registration fees currently being paid to the Commission.
Dorothy M. Donohue
Associate Counsel
Attachment (in .pdf format)