February 20, 1997


Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Rules Implementing Amendments to the Investment Advisers
Act of 1940 (File No. S7-31-96)

Dear Mr. Katz:

Massachusetts Financial Services Company ("MFS") appreciates the opportunity to comment on the Commission's proposal to adopt rules under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), in order to implement certain provisions of the Investment Advisers Supervision Coordination Act (the "Coordination Act").

MFS is an investment adviser registered with the Commission pursuant to the Advisers Act and manages a broad variety of open-end and closed-end investment companies, variable annuity products, institutional funds, and accounts for large institutional clients. MFS Institutional Advisors, Inc. ("MFSI") is an investment adviser registered with the Commission pursuant to the Advisers Act and is also registered in several states. MFSI provides investment management services exclusively to large institutional investors, including high net worth individuals. The history of the MFS organization dates to 1924 and the founding of America's first mutual fund, Massachusetts Investment Trust. The MFS organization now manages over $54 billion on behalf of over two million investors worldwide.

As a general matter, MFS is very supportive of the Commission's proposed rules, and believes that they appropriately allocate regulatory responsibility between the Commission and the states consistent with Congress' intent as evidenced in the Coordination Act. We would suggest, however, that certain of the proposed rules should be clarified or revised in certain respects, as is set forth in greater detail in the comment letter, dated February 10, 1997, filed by the Investment Company Institute (the "Institute") with the Commission. We support each of the recommendations made by the Institute, and we specifically note the following significant recommendations:

Second, for purposes of determining whether a "substantial portion" of an investment adviser representative's business consists of "retail" business, we would recommend that the test be 10% of such representative's clients, rather than a percentage of assets under management. We agree with the Institute's statement that the imposition of an additional asset test would result in significant additional compliance burdens for advisers but would result in very few, if any, additional investment adviser representatives being subject to state regulation.

Third, we agree with the Institute's recommendation that an investment adviser representative who already is registered as a broker-dealer representative should be exempt from state registration as an investment adviser representative. Most of MFSI's investment adviser representatives are registered as broker-dealer representatives with the NASD and with some or all of the state securities commissions. As broker-dealer representatives, these employees already are subject to various state competency and examination requirements, and it would serve no additional regulatory purpose to require their dual registration as investment adviser representatives.

If you have any questions or would like to discuss this matter further, please telephone me, collect, at (617) 954-5845.


Robert T. Burns

cc: Stephen E. Cavan
James F. DesMarais
Amy Lancellota
(Investment Company Institute)
Arnold D. Scott