SEC Votes to Adopt Amendments to the Redemption Fee Rule and Extend Compliance Date

FOR IMMEDIATE RELEASE
2006-167

Washington, D.C., Sept. 27, 2006 —The Securities and Exchange Commission voted on Sept. 26, 2006, to adopt amendments to Rule 22c-2, the redemption fee rule, under the Investment Company Act. The rule, which the Commission originally adopted in 2005, requires most mutual funds to enter into shareholder information agreements with intermediaries, such as broker-dealers, that hold shares on behalf of other investors. To help funds enforce restrictions on market timing and similar abusive transactions, these agreements provide funds access to information about the identity of customers involved in such transactions, including those made through so-called omnibus accounts. The rule also requires fund boards of directors to consider whether a redemption fee policy is appropriate for their funds.

The amendments to Rule 22c-2 that the Commission has voted to adopt clarify the operation of the rule, and reduce the number of shareholder information agreements that funds must enter into with their intermediaries.

The rule as originally adopted had a compliance date of Oct. 16, 2006. The amendments approved by the Commission will extend the compliance date for portions of the rule. The compliance date for entering into shareholder information agreements will be extended by 6 months, until April 16, 2007, and the date by which funds must be able to obtain information from intermediaries under those agreements will be extended by 12 months, until Oct. 16, 2007.

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The full text of the detailed release concerning these amendments will be posted to the SEC Web site as soon as possible.

  Additional materials: Final Rule Release No. IC-27504

http://www.sec.gov/news/press/2006-167.htm