May 28, 1999

Securities and Exchange Commission

450 5th Street, NW

Washington, DC


Attention: Jonathan G. Katz,

Secretary - Securities and Exchange Commission

Dear Sirs:

Re: File No. S7-10-99

Trading by U.S. Residents in Canadian Registered Accounts


We are writing in support of the U.S. Securities and Exchange Commissionís ("SEC") recent proposals which would permit persons residing in the United States to purchase securities for their Canadian tax-deferred registered retirement accounts.


C.I. Mutual Funds Inc. ("C.I.") is a registered adviser in the categories of investment counsel and portfolio manager with the Ontario Securities Commission and is the manager of several families of Canadian mutual funds.


C.I. is a member of The Investment Funds Institute of Canada ("IFIC") and, subject to the comments below, fully supports the proposed SEC rules. It is our understanding that IFIC will be submitting detailed comments on the proposed rules and C.I. expects to support IFIC's submissions.


While C.I. is generally pleased with the proposed rules, we are concerned with certain of the requirements contained therein. In particular, C.I. is concerned with the requirement that no information about a mutual fund be sent to any person who does not already hold securities of that mutual fund. As permitted by Canadian securities laws, C.I., like most Canadian mutual fund companies, utilizes consolidated offering documents to sell its mutual funds. In the case of C.I., for example, 31 mutual funds are currently qualified for distribution under our principal simplified prospectus and 21 mutual funds are covered by our largest Annual Report. Given the size of the Canadian market as a whole, "de-consolidation" or unbundling of our offering documents is not a practical or cost-effective solution. Such a restriction could lead many Canadian mutual fund companies to refuse to accept purchase orders from persons residing in the United States who would otherwise be permitted to make such purchases. The SEC should allow Canadian mutual fund companies relying on the proposed rules to deliver updated prospectuses which would include mutual fund securities already held in an investor's retirement account as well as mutual fund securities not held in an investor's account, provided the funds are disclosed in the same document.


C.I. is also concerned with the requirement in the proposed rules to include a "prominent statement" regarding the non-registered status of the mutual fund securities in all written offering materials. These offering materials include prospectuses, advertisements and newsletters. We submit that such extensive use of this disclaimer is overly burdensome and unnecessary. In our view, the prominent statement should be restricted to the mutual fund prospectus, which is the principal legal document governing the sale of mutual fund securities.


To conclude, C.I. is pleased with the initiatives of the SEC. We believe many thousands of Canadians living in the U.S. will benefit from the ability to actively manage their registered Canadian retirement accounts. Subject to the above comments, C.I. encourages an expeditious implementation of the proposed rules by the SEC.



Yours truly,




"Michael J. Killeen"


Michael J. Killeen

General Counsel and Corporate Secretary