ICI Supports MSRB Advertising Rule Amendments

Washington, DC, July 25, 2005 - The Institute supports amendments proposed by the Municipal Securities Rulemaking Board (MSRB) that would provide investors access to more current performance information and would make College Savings Plan ads consistent with mutual fund performance ads, as recommended by ICI.

Background
In June 2004, MSRB proposed to amend its advertising rule, Rule G-21, in order to provide investors in college savings plans with more information. ICI supported MSRB's efforts and recommended an amendment to Rule G-21 that would require all advertisements by brokers, dealers, and municipal securities dealers containing performance data for municipal fund securities to disclose a Web address or toll-free phone number where investors can obtain the most recent month-end performance information. The same is required of mutual funds under Rule 482 of the Securities Act of 1933.

In a comment letter, ICI stated that investment company securities and municipal fund securities share many common features in their offer and sale, including their advertisement to investors. Applying similar standards of regulation reduces the confusion to investors as well as the burdens conflicting regulatory requirements impose upon persons offering and selling both types of securities.

Under MSRB's recent proposal, the amendments would apply to advertisements containing performance data that are published on or after December 1, 2005.

ICI Position
The Institute reiterated its support for the proposed amendments in a more recent comment letter. ICI noted its support for facilitating investor access to more current performance information. By requiring that investors be provided this information, the proposal will also make more uniform the MSRB's advertising requirements with those applicable to mutual funds.

Related Links
Sections of this website is devoted to education savings issues and mutual fund disclosure in advertising.