SEC Denies Petition on Portfolio Investment Programs

Washington, DC, August 24, 2001 - The Institute submitted in March a rulemaking petition to the Securities and Exchange Commission requesting the adoption of a formal definition that would clarify that certain portfolio investment programs (PIPs) are "investment companies" within the meaning of the Investment Company Act of 1940. The SEC recently issued a letter denying the Institute's petition on the grounds that the PIPs described in the petition "do not at this time appear to raise interpretive issues that warrant the Commission undertaking a rulemaking." Notwithstanding its decision, the Commission states that it is interested in the concerns raised in the Institute's petition and "intends to monitor the development of these programs for compliance with all of the federal securities laws." As the programs develop, the Commission noted, it will consider what action, if any, may be necessary.