New England Funds
399 Boylston Street
Boston, Massachusetts 02109

January 28, 2000

Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 5^th Street, N.W.
Washington, D.C. 20549-0609

Re: File No. S7-23-99

Role of Independent Directors of Investment Companies
Release Nos. 33-7754; 34-42007; IC-24082

Dear Mr. Katz:

These comments are submitted on behalf of the trustees of the New England Funds (the "Trustees") on the proposed rules relating to the role of independent directors of investment companies. The Trustees are pleased at the opportunity to comment and specifically offer these comments to address the proposal to extend a director's disclosure requirements to information concerning their immediate family members, the proposal relating to the definition of "immediate family member" and the proposal to disclose a director's ownership of equity securities of funds in the fund complex.

Agreeing with the Commission that independent directors of mutual funds play a critical role, the Trustees commend the Commission's efforts to enhance the effectiveness of directors of management investment companies. The Trustees realize their special role in overseeing mutual fund operations and protecting shareholders' interests. With a view toward enhancing their effectiveness, the Trustees disclose pertinent information about themselves in fund documents and continually examine their dealings with fund management to ensure that their interests are always closely aligned with the interests of fund shareholders.

The Trustees strongly support the Commission's overall initiatives on the role of independent directors. However, they have expressed serious concerns about the proposal that would mandate disclosure of information about a director's immediate family members, the proposal relating to the definition of "immediate family member" and the proposal to disclose a director's ownership of equity securities of funds in the fund complex.

Directors should not be obliged to disclose immediate family member information.

The Trustees have no objections to the Commission's proposal that directors themselves be required to disclose additional information in fund disclosure documents. However, they strongly oppose the extension of the disclosure requirements to their immediate family members.

The Trustees understand the unique nature of an investment company and the special role that directors of an investment company have compared to the directors of typical corporations. The Trustees were fully informed of, and agree with, the high level of personal disclosures that must be made to safeguard against conflicts of interest and to comply with the attendant disclosure requirements. As part of the process of complying with these disclosure requirements, the Trustees complete yearly questionnaires that detail information about themselves to identify any conflicts of interest. The Trustees feel that to require further disclosure of information that relates to immediate family members is inappropriate.

In addition, the Trustees feel that the conflicts of interest are already adequately addressed under current federal and state law and under fiduciary principles for trustees by imposing duties to provide information on possible situations involving conflicts of interest. The Trustees have undertaken their fiduciary responsibilities in a diligent and conscientious manner and believe that possible conflicts of interest will best be addressed by means of the very real protections already in place.

The Trustees are concerned that the genuine effect of this proposal's breadth, if adopted, would be deterrence. Investment companies need to be able to attract qualified professionals to their boards. If this proposal is adopted, there is a greater likelihood that qualified candidates may decline an offer of directorship, a likely major cause of which would be these extensive disclosure requirements. Further, this proposed disclosure would negatively impact the privacy of a director and his/her family and most likely would produce tense family relations. Apart from this, it may be very difficult or impossible for a director to obtain the information from a reluctant family member.

The definition of "Immediate Family Member" should be narrowed.

If the Commission adopts the disclosure requirements discussed above, the Trustees believe that the Commission's proposed definition of "immediate family members" is too broad and includes family relationships that are too attenuated to provide useful information for fund shareholders. The Trustees see absolutely no need to disclose the activities of a director's father-in-law, mother-in-law, son-in-laws, daughter-in-laws, brother-in-laws and sister-in-laws, if such persons do not reside in a director's house and are financially independent of a director. If disclosure of information about a director's immediate family members is required, the Trustees recommend that a director should only be required to disclose information for family members who reside in the same house as the director and/or those whom are financially dependent on the director.

A director's disclosure of ownership of equity securities of funds in the fund complex should be limited to dollar-amount ranges.

The Commission proposes to require disclosure in fund statements of additional information and proxy statements of the aggregate dollar amount of equity securities of funds in the fund complex owned beneficially and of record by each director. The Trustees understand that when a director discloses holdings in a fund complex for which he/she serves as director, a clear message is sent to shareholders that, in addition to his/her fiduciary duty to shareholders, the director, like the shareholders, has a personal stake in the fund. If the Commission's proposal relating to a director's ownership of fund shares is adopted, the Trustees suggest that directors only be required to disclose the range of their respective holdings (e.g., $0 up to and including $10,000; in excess of $10,000 up to and including $50,000; in excess of $50,000 up to and including $100,000; in excess of $100,000). The requirement that directors disclose fund ownership within these dollar ranges would provide shareholders with sufficient information to assess directors' economic stakes without unreasonably invading their privacy.

The Trustees stress that except for these noted concerns, they generally welcome the current initiatives by the mutual fund industry and the Commission to enhance the independence and the effectiveness of boards of directors of investment companies. They appreciate and thank you for the opportunity to comment on these proposals.

Sincerely,

/s/ John E. Pelletier

John E. Pelletier
Secretary and Clerk, New England Funds