SEC Staff Issues Guidance on Form N-1A Amendments and Fund Profiles

Washington, DC, May 20, 1998 - The staff of the Securities and Exchange Commission has issued guidance addressing several questions regarding amended Form N-1A and new Rule 498 (authorizing the use of fund profiles). The staff is compiling a list of frequently asked questions and answers to those questions. It intends to make the list available in the near future, but determined that immediate dissemination of answers to some of the questions would help registrants prepare to file new registration statements and fund profiles.

Rule 485(a) Filing
Post-effective amendments to registration statements that are updated to comply with amended Form N-1A should be filed under Rule 485(a), because they likely will involve substantial changes to disclosure that do not fall within the scope of Rule 485(b). The SEC staff encourages registrants to request selective review of filings where appropriate.

Preparation of a Profile before the Amended Prospectus
While a fund must have an effective registration statement and a current prospectus under Section 10(a) of the Securities Act before it may use a profile, there is no requirement to update the registration statement to comply with amended Form N-1A before filing a profile. As a practical matter, the staff expects that funds would prepare revised prospectuses and profiles concurrently because the profile will summarize information that amended Form N-1A requires in a fund's prospectus.

Filing and Use of the Profile
The staff will not accept profile filings before June 1, 1998. A profile may be used after it has been on file with the Commission for 30 days, subject to the following exceptions:

In these cases, the profile may be used on the later of (1) 30 days after it is filed, or (2) the date that the registration statement or post-effective amendment becomes effective.

Three-Day Requirement
The staff has addressed certain issues related to the requirement under amended Form N-1A that a fund that receives a request for the Statement of Additional Information, or annual or semi-annual report, send the document within three business days of receiving the request (and the similar requirement in Rule 498, which also requires a fund to send the prospectus upon request within three business days). First, a fund must begin to comply with the requirements when its registration statement under amended Form N-1A becomes effective or when it begins to use a profile.

To establish compliance with the requirement in the context of an SEC examination, a fund should show that it maintains policies and procedures, internally and with financial intermediaries through which shares of the fund may be purchased or sold, that assure that the fund honors requests for the prospectus, SAI, and annual/semi-annual reports within the three business day period. The fund also should be able to demonstrate that its policies and procedures in fact result in the timely distribution of documents subject to the three business day requirement.

Four to Six Month Undertaking
The staff will not object if, before December 1, 1998, newly organized investment companies or series omit the undertaking to file updated financial statements within 4 to 6 months of the effective date of their registration statements. In addition, it will not object if funds with pending or effective registration statements containing the undertaking do not file the update. The staff's determination not to object under these circumstances is premised upon the fund providing an investor with an annual or semi-annual report upon request.