ICI Supports Fund Performance Presentation Standards Proposed by International Regulators, August 2003

Washington, DC, August 15, 2003 - The Institute strongly supports best practices for performance advertising recently recommended by the International Organization of Securities Commissioners (IOSCO).

Background
In July 2002, the Standing Committee on Investment Management (SC5) issued a report examining "collective investment funds'" performance presentation standards. The report reviewed the standards currently used by member jurisdictions with respect to performance presentations in funds, including fund advertisements and marketing materials, and articulated general regulatory principles based on the review. The Institute expressed strong support for a statement of general principles for the presentation of funds' performance information included in the report, and encouraged IOSCO in its efforts.

ICI Position
The Institute reiterates its support for the suggested best practices standards in a recent comment letter, and states that IOSCO should continue in its efforts to encourage jurisdictions to consider the comprehensiveness and effectiveness of their performance presentation standards (PPS).

The Institute supported other portions of the best practices and made recommendations to IOSCO on other issues. For example, the Institute:

supports the suggested best practice standards regarding standardized formulas, disclosure of fees and expenses, standardized time periods, currentness of performance information, and use of disclaimers;
urged IOSCO to encourage all member jurisdictions to adopt mandatory regulations to govern performance advertising;
opposed the suggested best practice standard relating to the use of performance benchmarks;
disagreed with the suggestion in the Report that a CIS should consider including additional data, such as standard deviation data in performance advertisements to demonstrate the volatility of its performance;
urged IOSCO to address the use of performance rankings in its best practice standards; and
requested that IOSCO omit the best practice standard that states that CIS should provide "additional relevant information" relating to performance upon the request of any investor.