NASD Issues Notice to Members Concerning Disclosure of Mutual Fund Fees

Washington, DC, December 4, 1998 - The National Association of Securities Dealers, Inc. has issued a Notice to Members, No. 98-107, to remind its members of their obligation to ensure that discussions of fees and expenses in mutual fund advertisements and sales literature are fair, balanced, and not misleading. The notice discusses three specific areas related to disclosure of fees and expenses: (1) the use of lists of fees and expenses that do not apply; (2) disclosure of maximum sales loads under SEC Rule 482; and (3) use of the term "no-load." The notice also indicates that NASDR's Investment Companies Committee has recommended that the NASDR staff comprehensively evaluate the standards that apply to disclosure of fees and expenses in mutual fund sales material. According to the notice, NASDR will seek the views of NASD members and the public as it evaluates the standards.