Mr. Jonathan Katz, Secretary
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-6009
RE: Proposed Rule 35d-1 - Fund Names
File No. S7-11-97
Dear Mr. Katz:
Capital Research and Management Company ("CRMC"), the investment adviser to the twenty-eight mutual funds in The American Funds Group, appreciates the opportunity to comment on proposed rule 35d-1 concerning mutual fund names.
CRMC generally supports rule 35d-1 as proposed and believes that it appropriately addresses concerns over various names that can be used by funds. Under the new rule, a fund with a name that suggests that it invests in a particular type of security would be required to invest at least 80% of its net assets in that type of security. A fund would be required to make this a fundamental policy of the fund.
While, we agree with the 80% threshold, we believe that a fund should not be required to make this a fundamental policy. As a mandatory rule, its existence alone is sufficient to compel compliance. However, requiring it to be a fundamental policy would be costly to the fund. If the Commission were to revise this policy in the future, a shareholder meeting would be required in order to reflect the change. Therefore, we recommend that funds be allowed to adopt the 80% investment requirement as a non-fundamental policy.
Thank you very much for considering CRMC's comments on this subject. If you have any questions please contact the undersigned at (213) 486-9652, Michael Downer at
(213) 486-9425, or Stuart Strachan at (213) 486-9345.
Sincerely yours,
Kristine M. Nishiyama