Institute Submits Comment Letter on Revised Proposed Amendments to NASD Sales Charge Rule

Washington, DC, September 10, 1998 - The Institute recently filed a comment letter on the revised proposed amendments to NASD Conduct Rule 2830 governing mutual fund sales charges. The letter focuses on three areas: (1) application of the sales charge limits to funds of funds; (2) the proposed prohibition on imposing loads on reinvested dividends; and (3) the calculation of contingent deferred sales loads.

The letter also expresses concern about certain issues that diminish the effectiveness of the rulemaking process, including: (1) the absence from the Commission's release of any mention of, or specific request for comments on, the material change to the NASD's originally proposed definition of "fund of funds;" (2) the lack of any discussion of the NASD's reaction to comments on its earlier proposal; and (3) the failure of the release to identify and discuss differences between the NASD's original proposal and the revised proposal. The letter recommends that the Commission and the NASD consider ways to improve the usefulness of information contained in Commission releases soliciting public comment on NASD rule proposals.