For Immediate Release                                       97-29
                                
                                
      SECURITIES AND EXCHANGE COMMISSION TO CONSIDER RULES
   IMPLEMENTING VARIOUS PROVISIONS OF THE NATIONAL SECURITIES
                MARKETS IMPROVEMENTS ACT OF 1996

                                
     Washington D.C., April 3, 1997--Today the Commission is
considering for adoption rules under the Investment Company Act
of 1940 relating to privately offered investment companies.  A
wide variety of issuers, including hedge funds, venture capital
pools, and certain structured finance vehicles, currently operate
as privately offered funds.

     The rules would implement various provisions of the National
Securities Markets Improvement Act of 1996.  The 1996 Act created
a new exclusion from investment company regulation for privately
offered funds that sell their securities solely to "qualified
purchasers."  A qualified purchaser generally is any individual
that owns $5 million in "investments" or an institution that owns
$25 million in "investments."  The term "investments" for
purposes of these provisions must be defined by Commission rule
by April 9, 1997.

     The 1996 Act also amended the existing exclusion from
investment company regulation for privately offered funds that
have 100 or fewer investors.  The 1996 Act directed the
Commission to adopt rules by April 9, 1997 defining certain terms
for purposes of a special provision permitting a privately
offered fund to convert into a qualified purchaser pool.  The
1996 Act also directed the Commission to adopt rules by October
11, 1997 addressing investments in privately offered funds by
"knowledgeable employees" and certain transfers of privately
offered funds' securities.

     The rules considered today would effect all of the
rulemaking requirements in the 1996 Act concerning privately
offered funds, as well as address certain related interpretive
issues that have arisen since the passage of the 1996 Act.

!    Rule 2a51-1 would define the term "investments" for purposes
     of the qualified purchaser definition to include securities,
     and real estate, commodity interests, physical commodities,
     certain financial contracts, and cash and cash equivalents
     held for investment purposes.  The rule also would address
     various forms of holding investments and the manner in which
     the amount of investments owned by a prospective qualified
     purchaser should be determined.

!    Rule 2a51-2 would define certain terms for purposes of the
     provisions that permit an existing privately offered fund to
     convert into a qualified purchaser pool or to be treated as
     a qualified purchaser.

!    Rule 2a51-3 would clarify certain interpretative issues
     concerning companies that are qualified purchasers.

!    Rule 3c-1 would permit existing privately offered funds to
     rely on the pre-1996 Act provision for determining whether
     certain investors that are companies are counted as one
     person for purposes of the 100-investor limit, in order to
     permit these funds to preserve their existing arrangements
     with those investors.

!    Rule 3c-5 would address investments in privately offered
     funds by "knowledgeable employees" of the funds and certain
     of their affiliates.

!    Rule 3c-6 would address transfers of securities of privately
     offered funds by gift or bequest or when caused by divorce
     or death.