M E M O R A N D U M

Susan Nash, Paul Cellupica, and I contacted Forrest Foss of T. Rowe Price on March 17, 2004 to clarify a concern raised in his February 6, 2004 comment letter on the Commission's proposal for disclosure regarding market timing and selective disclosure of portfolio holdings. Jim Murphy, a municipal bond fund manager for T. Rowe Price was present with Mr. Foss during our telephone conversation. Mr. Foss expressed a concern in his letter that the proposed disclosure requirements might discourage the practice in the municipal bond fund sector of making current or recent portfolio holdings systematically available to dealers who the fund uses to purchase and sell its securities. According to Mr. Foss and Mr. Murphy, municipal bond funds and bond dealers may subscribe to a third-party system that allows municipal bond funds to post their portfolio holdings, and allows bond dealers to access a particular fund's portfolio holding schedule if provided a password. The information sharing is used to assist portfolio managers in finding bonds suitable for their fund's portfolio as well as finding potential buyers should their fund be interested in selling a particular bond. According to Mr. Foss, municipal bond funds update their portfolio holdings data on this system as often as every six weeks.