NASDR Issues Advisory Re Performance Communications

Washington, DC, July 22, 1999 - In its Summer 1999 Regulatory & Compliance Alert, NASD Regulation, Inc. (NASDR) advises member firms to amend their historical performance communications to add either updated performance figures or clear disclosure that current performance is less than the figures shown when a security experiences an "abrupt negative change in performance." NASDR states that this additional disclosure is necessary to ensure that communications are fair and not misleading. Although NASDR recognizes that SEC rules require mutual funds to advertise historical total return data current to the most recent calendar quarter ended prior to the submission of an advertisement for publication, NASDR states that such data alone could be misleading if the fund's performance suffers materially prior to updating performance at the next calendar quarter end.