ICI Comments on Fee Proposal for Nasdaq Mutual Fund Quotation Service

Washington, DC, March 14, 2001 - The Institute has filed a comment letter with the Securities and Exchange Commission on Nasdaq's proposed amendments to NASD Rule 7090, which sets forth the fees assessed for the inclusion of open-end funds, closed-end funds, and UITs in Nasdaq's Mutual Fund Quotation Service (MFQS).

Under Nasdaq's proposal, if a UIT expires by its own terms during an annual billing period and is replaced within three months by a trust that is materially the same in share class and trust objective, Nasdaq would eliminate the application fee for the replacing trust. In addition, Nasdaq would permit the replacing trust to assume any annual listing fee that was paid by the expiring trust for that annual billing period.

The Institute's letter supports Nasdaq's proposal but questions the meaning and the propriety of the "materially similar share class" requirement. The letter asserts that the "materially similar objective" and the "three-month replacement" requirements are sufficient to ensure that UITs can take advantage of the special listing fee provisions in appropriate circumstances. The letter therefore recommends that the rule be modified consistent with this view. Moreover, to facilitate proper processing of MFQS listing applications, the letter also recommends that the MFQS listing application be modified to require identification of both the replacement trust and the expiring trust that is being replaced.