[Federal Register Volume 59, Number 136 (Monday, July 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17352]


[[Page Unknown]]

[Federal Register: July 18, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34354; File No. SR-NASD-93-69]

 

Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Notice of Filing and Order Granting Accelerated Approval to 
Amendment to Proposed Rule Change by National Association of Securities 
Dealers, Inc. Relating to Guidelines Regarding the Use of Rankings in 
Mutual Fund Advertisements and Sales Literature

July 12, 1994.

I. Introduction

    On November 22, 1993, the National Association of Securities 
Dealers, Inc. (``NASD'' or ``Association'') submitted a proposed rule 
change to the Securities and Exchange Commission (``SEC'' or 
``Commission'') pursuant to section 19(b)(1) of the Securities Exchange 
Act of 1934 (``Act'')\1\ and Rule 19b-4 thereunder.\2\ The proposal 
would adopt Guidelines Regarding the Use of Rankings in Investment 
Company Advertisements and Sales Literature (``Guidelines'') following 
Article III, Section 35 of the NASD's Rules of Fair Practice.\3\
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    \1\15 U.S.C. 78s(b)(1)(1988).
    \2\17 CFR 240.19b-4 (1993).
    \3\NASD Manual, Rules of Fair Practice, Art. III, Sec. 
35(d)(2)(M), (CCH)  2195.
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    Notice of the proposed rule change, as originally filed, together 
with its terms of substance was provided by the issuance of a 
Commission release (Securities Exchange Act Release No. 33606, February 
9, 1994) and by publication in the Federal Register (59 FR 7276, 
February 15, 1994). Six comments were received in response to the 
Commission release.
    On June 7, 1994, the NASD submitted Amendment No. 1 to the proposed 
rule change. Amendment No. 1 responds to the comment letters received 
by the Commission, amends the language of the filng to clarify the 
intent of the NASD, and prohibits members from using rankings other 
than those developed and produced by an entity meeting the Guidelines' 
definition of ``Ranking Entity.''
    Amendment No. 2, filed on June 13, 1994, further clarifies the rule 
change by making certain technical changes to the text of the rule 
change, and clarifies that rankings based on yield may use only the SEC 
standardized yield.
    By this release, the Commission: (i) solicits comments on Amendment 
Nos. 1 and 2; and (ii) approves the proposed rule change, as amended, 
on an accelerated basis.
    Below is the text of the rule change, as amended by Amendment Nos. 
1 and 2. Language added to the original proposal is italicized; 
proposed deletions to the language originally filed as SR-NASD-93-69 
are in brackets.
Guidelines for the Use of Rankings In Investment Companies [Mutual 
Fund] Advertisements and Sales Literature
I. Definition of ``Ranking Entity''
    For purposes of these guidelines, the term ``Ranking Entity'' 
refers to any entity that provides general information about investment 
companies [mutual funds] to the public, that is independent of the 
investment company [mutual Funds] and its affiliates, and whose 
services are not procured by the investment company [mutual fund] or 
any of its affiliates to assign the investment company [fund] a 
ranking.
II. General Prohibition
    Members shall not use in investment company advertisements, sales 
literature or general promotional material any investment company 
rankings other than those developed and produced by entities that meet 
the definition of ``Ranking Entity,'' and which conform to the 
requirements of the Guidelines herein.
[II.] III. Required Disclosures
A. Headlines/Prominent Statements
    1. A headlines or other prominent statement must not state or imply 
than an investment company [mutual fund] is the best performer in a 
category unless it is actually ranked first in the category.
    2. Prominent disclosure of the investment comany's [mutual fund's] 
ranking, the total number of investment companies [mutual funds] in the 
category, the name of the category, and the period on which the ranking 
is based (i.e., the length of the period and the ending date; or, the 
first day of the period and the ending date), must appear in close 
proximity to any headline or other prominent statement that refers to a 
ranking.
    B. All advertisements and sales literature containing an investment 
company [mutual fund] ranking must disclose, with respect to the 
ranking:
    1. the name of the category (e.g., growth [funds]);
    2. the number of investment companies [funds] in the category;
    3. the names of the Ranking Entity;
    4. the length of the period and the ending date, or, the first day 
of the period and the ending date;
    5. criteria on which the ranking is based;
    6. for investment companies [load funds] which assess front-end 
sales loads, whether the ranking takes into account sales charges;
    7. if the ranking is based on total return or the current SEC 
standardized yield, fees have been waived or expenses advanced during 
the period on which the ranking is based, and the waiver or advancement 
had a material effect on the total return or yield for that period 
[ranking], a statement to that effect; and
    8. the publisher of the ranking data (e.g., ``ABC Magazine, June 
1993''). The disclosure required by B1, B2, [and] B3, and B4 must be 
set forth prominently in the body of the advertisement or sales 
literature.
    C. If the investment company [mutual fund] ranking consists of a 
symbol (e.g., a star system) rather than a number, the advertisement or 
sales literature also must disclose the meaning of the symbol (e.g., a 
four-star ranking indicates that the fund is in the top 30% of all 
investment companies [mutual funds]).
    D. All advertisements and sales literature containing an investment 
company [mutual fund] ranking must disclose that past performance is no 
guarantee of future results.
[III.] IV. Time Periods
    A. Any investment company [mutual fund] ranking set forth in an 
advertisement or sales literature must be, at a minimum, current to the 
most recent calendar quarter ended, in the case of advertising, prior 
to the submission for publication, or, in the case of sales literature, 
prior to use.
    B. Except for money market mutual funds:
    1. advertisements and sales literature must not use any ranking 
based on a period of less than one year;
    2. an investment company [mutual fund] ranking based on total 
return must be accompanied by rankings based on total return for the 
[one, five and ten year periods (or life of the fund)] one year period 
for investment companies in existence for at least one year; the one 
and five year periods for investment companies in existence for at 
least five years, and the one, five and ten year periods for investment 
companies in existence for at least ten years supplied by the same 
Ranking Entity in the category and based on the same time period; and,
    3. an investment company ranking based on yield may be based only 
on the current SEC standardized yield. An [A] investment company 
[mutual fund] ranking based on the current SEC standardized yield must 
be accompanied by rankings based on total return for the [one, five and 
ten year periods (or life of the fund)] one year period for investment 
companies in existence for at least one year; the one and five year 
periods for investment companies in existence for at least five years, 
and the one, five and ten year periods for investment companies in 
existence for at least ten years supplied by the same Ranking Entity in 
the category and based on the same time period.
[IV.] V. Categories
    A. The choice of category (including a subcategory of a broader 
category) on which the investment company [mutual fund] ranking is 
based must be one that provides a sound basis for evaluating the 
performance of the investment company [fund].
    B. Subject to the standards below, an investment company [mutual 
fund] ranking must be based only on (1) a published category or 
subcategory created by a Ranking Entity or (2) a category or 
subcategory created by an investment company [fund] or an investment 
company [fund] affiliate, but based on the performance measurements of 
a Ranking Entity.
    C. When the investment company [mutual fund] ranking is based on a 
subcategory, the advertisement or sales literature must disclose the 
name of the full category and the investment company's [fund's] ranking 
and the number of investment companies [funds] in the full category. 
This requirement does not apply if the subcategory is (1) based solely 
on the investment objectives of the investment companies [funds] 
included and (2) created by a Ranking Entity. This disclosure could be 
included in a footnote.
    D. The advertisement or sales literature must not use any category 
or subcategory that is based upon the investment company's [mutual 
funds'] asset size (whether or not it has been created by a Ranking 
Entity).
    E. If an advertisement uses a category created by the investment 
company [mutual fund] or an investment company [fund] affiliate, 
including a ``subcategory'' of a category established by a Ranking 
Entity, the advertisement must prominently disclose:
    1. the fact that the investment company [fund] or its affiliate has 
created the ranking category;
    2. the number of investment companies [funds] in the category;
    3. the basis for selecting the category; and
    4. the Ranking Entity that developed the research on which the 
ranking is based.
    F. An advertisement or sales literature containing a headline or 
other prominent statement that proclaims an investment company [mutual 
fund] ranking created by an investment company [fund] or its affiliate 
must indicate, in close proximity to the headline or statement, that 
the investment company [mutual fund] ranking is based upon a category 
created by the investment company [fund] or its affiliate.
[V.] VI. Multiple Class/Two-Tier Funds
    Investment company [Mutual Fund] rankings for more than one class 
or investment company [fund] with the same portfolio must be 
accompanied by prominent disclosure of the fact that the investment 
companies [funds] or classes have a common portfolio.

II. Background

    The number of investment company ranking entities has increased 
substantially in recent years. There has been a corresponding increase 
in references to investment company rankings in investment company 
advertisements and sales literature. The use of these rankings has 
proven in many instances to be a source of confusion to investors, 
because an investment company's ranking may depend upon, among other 
things, the other investment companies against which its performance is 
compared, the time period during which the performance of the 
investment company is measured and whether the performance measurement 
used to rank the investment company reflects sales charges imposed. In 
response to the increasing reference by investment company groups to 
such investment company rankings in investment company advertisements 
and sales literature, the NASD filed the proposed rule change to 
provide guidance on the use of investment company rankings.

III. Comment Letters

    The Commission received letters from six commenters.\4\ All 
commenters except Blanchard, are explicitly in favor of the Guidelines, 
with recommended changes. Blanchard does not explicitly support or 
oppose the proposed rule change, and also recommends changes.
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    \4\See letter from Michael E. Freedman, President & CEO, The 
Blanchard Group of Funds (``Blanchard'') to Jonathan Katz, 
Secretary, SEC, dated February 20, 1994, letter from Paul Schott 
Stevens, General Counsel, Investment Company Institute (``ICI''), 
dated March 8, 1994; letter from Richard S. Cortese, Chair, NASAA 
Investment Company Sales Practices Committee (``NASAA''), dated 
March 7, 1994; letter from Thomas W. Joseph, Principal, Scudder, 
Stevens & Clark, Inc. (``Scudder''), dated March 8, 1994; letter 
from Forrest R. Foss, Vice President and Assistant Legal Counsel, T. 
Rowe Price Associates, Inc. (``Price''), dated March 14, 1994; and 
letter from Diane Brock, Vice President, Charles Schwab & Co., Inc. 
(``Schwab''), dated March 31, 1994.
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    1. Several commenters object to Guidelines IV.B.2. and IV.B.3., 
which would require an investment company to obtain a ranking from a 
ranking agency for the life of an investment company if an investment 
company is less than 10 years old. These commenters state that it is 
impossible to obtain a rankings from ranking agencies for the life of 
an investment company.
    In response to these comments, the NASD has amended Sections 
IV.B.2. and IV.B.3. to require that investment company rankings based 
on total return or the current SEC standardized yield must be 
accompanied by rankings for one year where the investment company has 
been in existence for at least one year but fewer than five, one and 
five years where the investment company has been in existence for at 
least five years but fewer than ten, and one, five and ten years where 
the investment company has been in existence for ten years or more. The 
NASD believes that a meaningful comparison of rankings in excess of one 
year should include multiple time periods for comparison to avoid the 
possibility of ``cherry picking'' only those time periods in which any 
particular investment company was highly ranked. The requirement in the 
proposed Guidelines to supply life of investment company rankings has 
been eliminated.
    2. Commenters also object to the requirement that all rankings 
include rankings over 1, 5, and 10 year periods. The ICI notes that if 
a Ranking Entity ranks funds over a 3 year period, the member could not 
use that ranking.
    The NASD believes that it is important to require a one-year time 
period to be included to permit the evaluation of an investment 
company's immediate performance against its performance over time. The 
required use of one-year ranking periods reduces the potential for 
rankings to be deceptive or misleading. The Guidelines do not foreclose 
the use of a three-year time period, or any other time period, so long 
as all time periods required to be used by the Guidelines are included.
    3. The ICI also objects to Guideline III.B.7., which would require 
a statement that an investment company's ranking was materially 
improved by virtue of a fee waiver or expense advancement if that fee 
waiver or expense advancement had an effect on the rankings. The ICI's 
suggested alternative is to focus on the waiver or advancement's effect 
on total return or yield rather than the investment company's ranking. 
The ICI states that if the ranking is based upon total return or yield, 
the investment company has benefited from a fee waiver or expense 
advancement, and that waiver or advancement has had a material impact 
upon total return or yield, the advertisement should state that the fee 
waiver or expense advancement has had a material impact upon total 
return or yield.
    The NASD recognizes that an investment company would most likely 
not know if fee waivers or expense advancements had a material effect 
on the investment company's ranking since Ranking Entities, rather than 
funds, develop the rankings. It would be very difficult to provide data 
concerning such effects since the data would not have been compiled by 
either the investment company or the Ranking Entity.
    Therefore the NASD has amended Section III.B.7. to require that 
where the ranking is based on total return or SEC standardized yield, 
and where fees waived or expenses advanced during the period on which 
the ranking is based had a material effect on total return or yield for 
such period, a statement to that effect shall be included. Thus, 
members are still capable of providing investors disclosure concerning 
the potential effects of fee waivers and expense advancements on 
investment company performance and rankings without having to provide 
data that is not available. The requirement of whether such waived fees 
or advanced expenses had a material effect on the ranking has been 
eliminated.
    4. Scudder suggests that load funds should be required to disclose 
their actual load, rather than just disclosing that they have a load if 
a ranking does not reflect that load.
    The NASD believes that it is important for investors to know 
whether a ranking for a particular investment company has taken into 
account the investment company's sales load. However, the NASD has 
determined not to require the disclosure of the actual sales load, 
which is already required to be disclosed by other provisions of the 
securities laws.
    5. Scudder also suggests that the Guidelines should focus on total 
return over 1, 5, and 10 year periods rather than on rankings.
    The NASD believes that a focus on total return would not address 
the types of harm against which the Guidelines are designed to protect. 
The Guidelines were developed to address the dissemination to the 
public of information about investment company rankings as a basis for 
the purchase and sale of investment company shares.
    6. Price raises a specific issue with respect to Morningstar 
rankings. Morningstar produces a single blended ranking taking into 
account performance over 3, 5, and 10 year periods, taking into account 
risk. Price states that if this ranking is used, it should not be 
required to use component rankings.
    The NASD does not believe that a blended ranking is an appropriate 
substitute for the component rankings of three, five and ten years. 
First, the NASD's proposed Guidelines require time-frame components of 
one, five and ten years. Second, a blended rating could significantly 
obscure that would otherwise be meaningful information to an investor. 
As noted above, the NASD believes that a meaningful comparison of 
rankings in excess of one year should include multiple time periods for 
comparison to avoid the possibility of investor confusion. Also, as 
noted above, the NASD believes that it is important to require a one-
year time period to be included to permit the evaluation of an 
investment company's immediate performance against its performance over 
time. The required use of one-year ranking periods reduces the 
potential for rankings to be deceptive or misleading.
    7. NASAA objects to permitting funds to self-select a universe of 
funds against which they rank themselves. NASAA would prefer to 
prohibit self-selected rankings, or, alternatively, would require a 
comparison against a relevant unmanaged index in addition to the 
comparison against the self-selected universe.
    Pursuant to Section 35(c) to Article III of the NASD Rules of Fair 
Practice, all new advertisements and sales literature concerning 
registered investment companies that include or incorporate rankings 
must be filed within 10 days of first use with the NASD's Advertising 
Regulation Department for review, along with a copy of the data, 
ranking or comparison on which the ranking is based. If the ranking is 
not generally published or is the creation of the investment company, 
its underwriter or affiliate, it must be filed for review and approval 
at least 10 days prior to first use.\5\ In either case, the NASD shall 
have the opportunity to determine whether rankings based on a self-
selected universe of funds comport with the basic requirements of 
Section 35 that communications to the public be based on fair dealing 
and good faith.
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    \5\See Securities Exchange Act Release No. 33780 (Mar. 17, 
1994), 59 FR 14005 (Mar. 24, 1994).
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    8. NASAA also suggests that the core elements of the Guidelines be 
incorporated into Article III, Section 35 of the NASD Rules of Fair 
Practice.
    The Guidelines will be incorporated as guidelines to Article III, 
Section 35 to the Rules of Fair Practice. Pursuant to Article I, 
Section (o) to the NASD By-Laws, the rules of the NASD include the 
Rules of Fair Practice and any interpretations promulgated thereunder. 
Any guideline, policy or interpretation promulgated under a Rule of 
Fair Practice is, therefore, enforceable by the NASD as if it were a 
Rule of Fair Practice.
    9. Schwab publishes the Schwab Mutual Funds Performance Guide 
(``Schwab Guide''). The Schwab Guide provides twenty items of 
information about each investment company available in Schwab's Mutual 
Fund Marketplace. Schwab states that the Schwab Guide does not resemble 
typical investment company advertisements or sales literature, but 
would fall under the Guidelines because Schwab sells each investment 
company listed in the Schwab Guide. Schwab objects to the application 
of the Guidelines to the Schwab Guide and similar publications.
    The NASD understands that Schwab has requested exemption from 
application of the proposed Guidelines to the Schwab Guide on the basis 
that such a requirement would entail significant additional information 
to the Schwab Guide, making it ``too long and complicated and too 
expensive to produce and distribute.'' However, the Schwab Guide is 
distributed by Schwab, a member firm, to the public in connection with 
the purchase or sale of funds offered through Schwab's Mutual Fund 
Marketplace'' (``MFMP''), and thus qualifies under NASD definitions as 
``advertisement'' or ``sales literature.'' Additionally, the 
performance rankings in the Schwab Guide will be subject to the 
proposed Guidelines since Schwab qualifies under the definition of 
``Ranking Entity'' in the proposed Guidelines.
    If Schwab, or any other member firm, uses Schwab's investment 
company rankings, or any other Ranking Entity's investment company 
rankings, in connection with the purchase or sale of such investment 
companies, then the use of such rankings is subject to compliance not 
only with the general requirements of Article III, Section 35 to the 
NASD Rules of Fair Practice, but also with the specific requirements 
under the proposed Guidelines, if adopted.

IV. Amendment Nos. 1 and 2

    As mentioned above, the NASD filed Amendment No. 1 to the rule 
filing in order to respond to the six comment letters received by the 
NASD and the Commission. Amendment No. 2 was filed to further clarify 
the proposed rule change and to ensure that the text of the proposed 
rule change was consistent with the definition of similar terms used in 
the federal securities laws.\6\ Amendment No. 2 adds a new Section II. 
to the Guidelines to clarify that members only use the rankings of 
those entities included in the definition of ``Ranking Entity,'' and 
are precluded from using rankings of any entity that falls outside the 
definition. Sections II-V. will be redesignated Sections III.-VI. 
Amendment No. 2 also replaces the phrase ``Mutual Fund'' in the heading 
of the Guidelines and throughout the text with the phrase ``investment 
company'' to clarify that the Guidelines apply to all registered 
investment companies, including both open-end and closed-end management 
companies, as those terms are defined and classified in the Investment 
Company Act of 1940.
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    \6\The NASD proposes to:
    1. Reposition Subsection I.A., which was added as a new 
Subsection in SR-NASD-93-69, Amendment No. 2, to new Section II. 
entitled ``General Prohibition,'' and renumber the remaining 
Sections accordingly;
    2. Subsection III.B.6.: replace the phrase ``sales charges'' in 
the first line (which was added in Amendment No. 2) with the phrase 
``front-end sales loads'' to retain consistency with the definition 
of ``sales load'' in Section 2(a)(35) of the Investment Company Act 
of 1940 and to clarify that the Subsection applies only to front-end 
sales loads;
    3. Subsection IV.A.: insert the phrase ``in the case of 
advertising'' between the words ``ended'' and ``prior,'' and insert 
the phrase ``or, in the case of sales literature, prior to use'' 
after the word ``publication,'' to make the Subsection consistent 
with SEC Rule 43b-1; and
    4. Subsection IV.B.3.: insert the sentence ``an investment 
company ranking based on yield may be based only on the current SEC 
standardized yield'' in the beginning of the Subsection to clarify 
that rankings based on yield may use only the SEC standardized 
yield.
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    Interested persons are invited to submit written data, views, and 
arguments concerning Amendment Nos. 1 and 2. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549. Copies of the submissions, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of the filing 
will also be available for inspection and copying at the principal 
office of the NASD. All submissions should refer to SR-NASD-93-69 and 
should be submitted by August 8, 1994.

V. Discussion and Findings

    The Commission believes that the NASD has addressed the relevant 
question raised in the comment letters. The Commission believes that 
the amendments to the proposed rule change adequately respond to the 
concerns of commenters that certain provisions of the Guidelines as 
initially proposed imposed undue burdens upon members (e.g., ``life of 
fund'' rankings; judgments as to whether a fee waiver or expense 
advancement materially improved the ranking of an investment company). 
The Commission believes that the Guidelines, as amended, will assist 
investment company investors in making informed investment decisions 
based upon information set forth in a clear and uniform manner.
    Certain commenters objected that the Guidelines require the use of 
rankings over 1, 5 and 10 years periods. They noted that certain 
Ranking Entities do not produce one-year rankings, and that members 
would be precluded from using Ranking Entities using other time 
periods. The NASD has stated that it recognizes that the proposed rule 
change may prevent members from using certain Ranking Entities.\7\ 
However, the NASD stated that it believes that the protection and 
benefits to the investing public of a consistent and unitary standard 
for the use of mutual fund rankings outweigh the competitive 
disadvantage for certain Ranking Entities that do not currently produce 
rankings in conformance with the Guidelines. The NASD also noted that 
it believes that the fiscal burden that Ranking Entities would need to 
incur to conform their publication to the requirements of the 
Guidelines would be slight. The Commission agrees with the NASD that 
any competitive burdens imposed by the Guidelines are outweighed by the 
investor protection benefits that the Guidelines will provide.
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    \7\See letter from Suzanne E. Rothwell, Associate General 
Counsel, NASD to Mark P. Barracca, Branch Chief, Over-the-Counter 
Regulation, SEC, dated July 5, 1994.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to the NASD. Specifically, the Commission 
believes that rule change is consistent with the provisions of Section 
15A(b)(6) of the Act.\8\ Section 15A(b)(6), among other things, 
requires that the rules of the NASD be designed to perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. The 
Guidelines will enhance investor protection and the public interest 
because they promote a clear and uniform manner in which to disseminate 
to the public information about investment company rankings as a basis 
for the purchase and sale of investment company shares.
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    \8\15 U.S.C. 78o-3(b)(6) (1988).
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    By letter dated July 6, 1994, the NASD requests that the Commission 
find good cause to approve the proposed rule change as amended by 
Amendment Nos. 1 and 2, prior to the 30th day following publication of 
notice of the filing of such Amendments in the Federal Register.\9\ The 
NASD states that the proposed rule change is necessary to address 
regulatory concerns regarding the disparate information being provided 
to investors in investment company advertising and sales literature. 
The NASD notes that there are currently no specific guidelines 
regulating the use of rankings in investment company advertising and 
sales literature, and that the proposed rule change will ensure that 
investors are provided clear information and fair and balanced ranking 
comparisons.
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    \9\Letter from Suzanne E. Rothwell, Associate General Counsel, 
NASD, to Mark P. Barracca, Branch Chief, SEC, dated July 6, 1994.
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    Pursuant to Section 19(b)(2) of the Act\10\, the Commission finds 
good cause for approving the proposed rule change, as amended, prior to 
the 30th day after publication of Amendment Nos. 1 and 2 in the Federal 
Register. The proposed rule change, which was published in the Federal 
Register for the full statutory period, would have: (1) Required 
members to provide ``life of fund'' rankings for investment companies 
less than 10 years old; (2) required members to state whether a fee 
waiver or expense advancement materially improved the ranking of an 
investment company; and (3) applied only to mutual funds. The proposed 
amendment simply eliminates the ``life of fund'' ranking requirement, 
requires members to state whether fees waived or expenses advanced 
during the period on which the ranking is based had a material effect 
on total return or yield for such period, and applies the guidelines to 
all investment companies. The Commission also believes it is important 
for ranking information to be provided to investors in a uniform manner 
and in a format that permits investors to make educated comparisons of 
investment company rankings. Because the Commission believes that the 
Guidelines will improve the ability of investment company investors to 
make sound judgments based upon clear and uniform information, the 
Commission believes that the rule filing should be approved, as 
amended, without delay.
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    \10\15 U.S.C. 78s(b)(2) (1998).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that SR-NASD-93-69 be, and hereby is, approved effective immediately.

    For the Commission, by the Division of Market Regulation 
pursuant to delegated authority.\11\
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    \11\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-17352 Filed 7-15-94; 8:45 am]
BILLING CODE 8010-01-M