February 10, 1997
     
     
     
VIA E-MAIL & AIRBORNE EXPRESS
     
Mr. Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.  Stop 6-9
Washington, DC 20549
     
Re: File No. S7-30-96
    Proposed Rules Implementing Provisions of the National Securities
    Markets Improvement Act of 1940 that Apply to Private Investment Companies
     
Dear Mr. Katz:
     
This letter is submitted by A I M Advisors, Inc. ("AIM"), a registered 
investment adviser which together with its affiliates advises 42 investment 
company portfolios with more than $65 billion in assets, in response to the 
request of the Securities and Exchange Commission (the "SEC") for comment on 
proposed rules set forth in Release No. IC-22405 (December 18, 1996) (the 
"Release") that would implement certain provisions of the National Securities 
Markets Improvement Act of 1996 (the "1996 Act") pertaining to private 
investment companies.  AIM agrees with the comments regarding the Release which 
are being submitted by the Investment Company Institute (the "ICI").  AIM 
particularly supports the ICI's comments regarding the need for clarification of
the meaning of the "no public offering" requirement.  AIM also makes an 
additional comment, which is set forth below.
     
Summary Statement
     
AIM strongly supports the position taken by Congress and the SEC that trusts 
should not be included within the definition of qualified purchaser unless the 
trustee or other person authorized to make decisions with respect to the trust, 
and each settlor or other person who has contributed assets to the trust, are 
qualified purchasers.  AIM recommends that in the release adopting final rules 
to implement the 1996 Act, the SEC specifically state that such provision 
encompasses all participant-directed defined contribution plans.
     
Discussion
     
The Release states that the legislative history of the 1996 Act "indicates that 
section 3(c)(7) funds are to be limited to investors with a high degree of 
financial sophistication who are in a position to appreciate the risks 
associated with investment pools that do not have the protections afforded by 
the Investment Company Act."   Participants in participant-directed defined 
contribution plans often do not have the financial sophistication necessary to 
appreciate such risks.  These plans are generally organized as trusts.  If they 
are so organized, the plan would not be a qualified purchaser unless the trustee
or other person authorized to make decisions with respect to the plan, and each 
participant who has contributed assets to the trust, are qualified purchasers.  
     
AIM believes that participants in all participant-directed defined contribution 
plans should have the protections afforded by the 1940 Act, and recommends that 
the SEC specifically state in the release adopting rules under Section 2(a)(51) 
that Section 2(a)(51)(A)(iii) encompasses such plans. 
     
Proposed Rule 3c-5 provides that in determining whether the outstanding 
securities of a Section 3(c)(7) fund are owned exclusively by qualified 
purchasers, securities held by a Knowledgeable Employee are to be excluded.  AIM
believes that this exclusion should not extend to a participant-directed defined
contribution plan of which the Knowledgeable Employee is a participant, unless 
all such participants are Knowledgeable Employees or are otherwise qualified 
purchasers.  AIM is aware of a previous no-action letter issued by the SEC 
(Caxton Corporation, available December 28, 1994) which provided that under the 
specific circumstances described in the incoming letter, the 
participant-directed defined contribution plan would be considered one 
beneficial owner for purposes of Section 3(c)(1) of the 1940 Act.  AIM believes 
that such letter should not be interpreted to extend to a Section 3(c)(7) fund. 
Instead, a plan of the type discussed in such letter should, as stated above, be
permitted to invest in a Section 3(c)(7) fund only if all participants are 
Knowledgeable Employees.
     
AIM appreciates the opportunity to comment on these proposals.  If you have any 
questions regarding our comments, please contact the undersigned at (713) 
214-1191.
     
Sincerely,
     
     
     
Carol F. Relihan
General Counsel,
Senior Vice President
and Secretary
     
cc: Barry P. Barbash, Director
    Division of Investment Management
     
    Kenneth J. Berman, Assistant Director 
    Office of Regulatory Policy
    Division of Investment Management