The following Letter Type C, or variations thereof, was submitted by individuals or entities.
Letter Type C:
Jonathon G. Katz, Secretary
RE: Release Nos. 33-8358; 39-49148; File No. 57-06-04.
Confirmation Requirements and Point of Sale Disclosure Requirements for Transactions in
Dear Mr. Katz:
Our broker/dealer is an independent "introducing broker/dealer" serving the financial planning and insurance oriented registered representative.
The matters at hand now are the proposed "point of sale" disclosures and post-sale confirmations. The essence of these proposed rules are that the registered representative will deliver to the mutual fund investor a "point of sale" example of the commissions paid by the investor, the concession paid to the broker/dealer, and a break out of the ongoing fees charged by the fund company and fees paid to the broker/dealer, including what you refer to as "soft dollars". Once the customer's investment is finalized, a confirmation will be required giving the investor specific numbers regarding their investment.
Effectively, you are asking that our representative deliver fund specific information at the point of sale, then the broker/dealer must deliver investment specific information after the sale. We have always had a requirement to deliver a prospectus prior to the sale and the fund company has had a requirement to deliver a statement to the investor after the sale.
We do not have a problem with enhanced disclosure to the investor since it will add to investor confidence in the fairness of our investment marketplace as a whole. What does concern us about the proposal as written is that it seems to be directed at the broker/dealer with no requirements on the fund sponsors to provide the point of sale information or the post sale disclosure in a uniform manner.
Please consider this correspondence as a request that you extend the comment period at least 120-days; and that you more clearly specify how the mutual fund companies will be required to provide the information necessary for the point of sale disclosure and post sale confirmation in a uniform manner.
We also request that you include the two primary independent broker/dealer industry associations in your discussions with industry members. The Financial Services Institute (FSI) and the National Association of Independent BrokerIDealers (NAIBD) are actively involved with broker/dealers such as ours and are in position to represent us effectively. These associations can be reached at www.financialservices.org and www.naibd.com.
Thank you for your time and consideration of this correspondence.