MSRB Seeks Approval of Amendments Relating to 529 College Savings Plan Ads

Washington, DC, December 22, 2004 - The Municipal Securities Rulemaking Board (MSRB) is seeking the SEC's approval of rule amendments intended to provide investors in Section 529 college savings plans with more information about 529 plan performance, risks, objectives, and expenses.

Background
In June 2004, MSRB proposed for comment amendments to MSRB Rule G-21, relating to advertising of municipal fund securities. The MSRB has since completed it review of public comments, and filed amendments with the SEC for approval. The rules proposed by MSRB would impose point-of-sale disclosure obligations on municipal securities dealers that market 529 plans to out of state investors.

MSRB also is seeking public comment on additional amendments to Rule G-21 that, consistent with previous Institute recommendations, would require:

advertisements to include a legend that identifies either a toll-free or collect phone number or website where investors may obtain current total return quotations; and
that performance data in an advertisement be calculated as of the most recent practicable date considering the type of municipal fund security and the media through which the data will be conveyed.

Comments on the additional Rule G-21 amendments are due by January 15, 2005.

ICI Position
The Institute supports efforts to improve disclosure in the 529 plan market in order to help investors make informed investment decisions. ICI also recently supported an MSRB proposal to increase consistency between its advertising rules and the SEC's mutual fund performance advertising rules. In a comment letter on the proposal, ICI stated its belief that investors will benefit from a consistent approach.

Related Links
Additional information about the benefits of saving for education, including an online brochure that helps individuals understand 529 plans, is available on this website.