September 2006 Archives
SEC Adopts Amendments to Rule 22c-2 and Extends Compliance Date
On September 26, 2006, the SEC adopted amendments to Rule 22c-2 under the Investment Company Act of 1940. Rule 22c-2, among other things, provides that a mutual fund may not allow redemption of its shares within seven days of purchase unless the fund enters into information sharing agreements with financial intermediaries that hold fund shares through omnibus accounts. Specifically, the intermediaries must agree to provide the fund with information about the shareholders who own shares of the fund through the intermediary and to restrict or prohibit trading by shareholders who violate the fund’s restrictions on short-term trading.
NASD Issues Interpretive Guidance Regarding Recent Amendments to NASD Rules Governing Communications with the Public Relating to Mutual Fund Performance
On September 1, 2006, NASD issued Notice to Members 06-48 to provide guidance on the new “text box” amendments to NASD Rules 2210 and 2211. The new amendments impose certain disclosure and presentation requirements for communications with the public, other than institutional sales material and public appearances, regarding performance data for mutual funds other than money market funds (performance sales material). The new requirements will apply to performance sales material used on or after April 1, 2007.