Subject: Comments on File No. S7-11-97
Date:    4/18/97 3:30 PM
     
     
     We are in agreement that net assets is the appropriate basis to 
     measure compliance with the 80% threshold.  However, it is our belief 
     that the accounting policy with respect to the accounting treatment
     for securities loaned set forth in footnote 31 on page 14 of the 
     proposed release is incorrect and should be eliminated or modified to 
     reflect industry practice.  The footnote indicates that the "when a
     company lends its securities, total assets would include a receivable 
     for the security loaned..."  It is investment company industry 
     practice not to record the receivable, but rather indicate in the 
     portfolio of investments the securities out on loan and disclose, 
     usually in the footnotes to the company's financial statements, the
     aggregate value of the portfolio securities loaned and the value of
     the collateral held.
     
     Under Statement of Financial Accounting Standards No. 125, securities 
     lending transactions of the type that investment companies typically 
     engage in are treated as financing transactions and not sales, leading 
     to the disclosure indicated above.  This has been the conclusion of
     the Investment Companies Committee of the American Institute of 
     Certified Public Accountants at a meeting to discuss the relevant 
     paragraphs of statement No. 125.
     
     In addition, we understand that the proposed release would eliminate 
     the 65% asset test as it relates to investment company names indicated 
     under section C. - Other Investment Company Names.  However, it is not 
     apparent when reading this section that this is the case (it may be
     inferred that these types of funds would be excluded from this release 
     and would continue to monitor compliance based on 65% of total 
     assets).  Please clarify that although this release would not codify 
     the Division's position with respect to certain investment company 
     names (i.e., small cap, etc.), funds with these names would, in fact, 
     be subject to the 80% test (based on net assets).  Please clarify this 
     intention in this section, as there has been some confusion among 
     registrants.
     
     If you require any addition information, you may reply to this e-mail 
     or contact me at:
     
     Bear Stearns Funds Management Inc.
     245 Park Avenue - 15th Floor
     New York, NY  10167
     Telephone:  (212) 272-2093
     Fax:        (212) 272-5896
     
     Sincerely,
     
     
     FRANK J. MARESCA       
     
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