SEC Proposes to Exclude Certain Research Reports from NASD Advertising Filing Requirements

Washington, DC, June 19, 1998 - The SEC recently published for comment a proposal to amend NASD Conduct Rule 2210 to exclude independently prepared investment company research reports that are used as sales literature from the filing requirements of Rule 2210.

Under the proposal, a research report concerning a registered investment company would be excluded from Rule 2210's filing requirements provided: (i) it is prepared by a research firm that is independent of the fund, its affiliates, and the member using the report; (ii) in preparing the report, the research firm's services are not procured by the fund, its affiliates, or the member using the report; (iii) the research firm prepares similar reports with respect to a substantial number of funds; (iv) the report is distributed and updated with reasonable regularity; and (v) the report has not been materially altered by the member using the report. Research reports that are not filed would still be subject to the Rule 2210's content requirements and spot-check procedures.

Comments are due to the SEC no later than Monday, July 6, 1998.