ICI Encourages Associations to Alert Members of Redemption Fee Rule Compliance Requirements, February 2007

Washington, DC, February 12, 2007 - The Institute has sent letters to financial intermediary trade groups urging them to alert their members to the requirements of an SEC redemption fee rule. ICI also provides links to more detailed information about the rule and its impact on financial intermediaries.

Background
The compliance date for Rule 22c-2 under the Investment Company Act of 1940, the so-called redemption fee rule, is April 16, 2007. The rule includes, among other things, shareholder information agreement provisions that funds and financial intermediaries must meet. Failure to have an agreement executed by April 16 may result in intermediaries losing the ability to effect mutual fund transactions.

ICI Position
ICI's letter solicits assistance in informing affected intermediaries of the new regulatory requirement, explains the impact on intermediaries' ability to effect mutual fund transactions through nominee accounts, and notes the effect of failing to execute a "shareholder information agreement." The letter was sent to the American Bankers Association (ABA), the Association of Independent Trustees (AITCO), the American Society of Pension Professionals and Actuaries (ASPPA), the Financial Services Institute, Independent Community Bankers of America (ICBA), NAVA, the Securities Industry and Financial Markets Association (SIFMA), and the SPARK Institute.

Related Links
The Institute's Standardized Data Reporting Working Group provided detailed information regarding the implementation of Rule 22c-2, including model contractual language and a mutual fund agreement package, for ICI members. The sample package also helps educate intermediaries of the new requirements, and assists them in understanding their obligations under the rule, including the requirement to have agreements in place by April 16, 2007. ICI notes that funds and financial intermediaries should feel free to revise the sample documents provided below as necessary to address their particular circumstances.

ICI MEMBER MEMORANDUM

Limited No-Action Relief for Certain Foreign Intermediaries, February 2007 (pdf)
Amendments to the Rule, September 2006, (pdf)
Redemption Fee Rule Adopted, March 2005 (pdf)
Model Contractual Clauses -- Variable Annuities, January 2007 (pdf)
Model Contractual Clauses for Agents of Financial Intermediaries, November 2006 (pdf)
Revised Model Contractual Clauses, October 2006 (pdf)
Sample Agreement Package for Intermediaries, March 2006 (pdf)

ICI Encourages Associations to Alert Members of Redemption Fee Rule Compliance Date

ICI MEMBER MEMORANDUM

DOCUMENTS FOR INTERMEDIARIES

SAMPLE PACKAGE EXCERPTS

MODEL CONTRACTUAL CLAUSES