Institute Comments on Agenda for Upcoming Conference on Uniformity of Federal-State Securities Regulation

Washington, DC, April 28, 1998 - Each year, pursuant to Section 19(c) of the Securities Act of 1933, the Securities and Exchange Commission ("SEC") and the North American Securities Administrators Association ("NASAA") hold a conference that is intended, in part, to increase uniformity in matters relating to federal and state regulation of the securities industry. In anticipation of the conference, the SEC publishes for comment the proposed conference agenda. The Institute has submitted a comment letter on the agenda proposed for this year's conference, which will be held on May 4, 1998.

The Institute's letter notes that, while the states have implemented those provisions in the National Securities Markets Improvement Act of 1996 ("NSMIA") that relate to investment company filings in a largely uniform manner, the same cannot be said of the provisions in NSMIA relating to investment advisers and their representatives. The letter recommends that the SEC and the members of NASAA use this year's conference as an opportunity to discuss in detail the limits imposed by NSMIA on state regulatory authority and state enforcement authority. With respect to state regulatory authority, the Institute expresses concerns with states attempting to impose substantive regulation on the operations of federally registered investment advisers and to regulate federally registered investment advisers indirectly through their registered representatives. With respect to state enforcement authority, the Institute's letter expresses a concern with states continuing to attempt to proscribe "dishonest" or "unethical" conduct, even though NSMIA expressly limits their enforcement authority to investigating and bringing enforcement actions with respect to fraud and deceit. The Institute's letter strongly encourages that the SEC and the states to discuss these issues in more detail.

The Institute's letter also recommends that the SEC and NASAA actively involve representatives of industry in ongoing discussions relating to a proposed electronic filing system for investment advisers and proposed revisions to the investment adviser filing forms. According to the letter, such participation should help ensure that the resulting products are user-friendly and should facilitate their future acceptance by the industry.