For Release: May 26, 2004
Contact: Corporate Communications (202) 216-2000
SIA APPLAUDS NEW SEC RULES ON BREAKPOINT DiSCLOSURES, CODE OF ETHICS FOR INVESTMENT ADVISERS
WASHINGTON, D.C., May 26, 2004 - The Securities Industry Association today welcomed the Securities and Exchange Commission's adoption of a rule that will significantly clarify costs for mutual-fund investors by requiring that information on breakpoint discounts be clearly detailed in prospectuses. SIA also applauded the commission's approval of a second rule requiring investment advisers to adopt a code of ethics. "The SEC today broadened the scope of critical pricing information available to investors and took an important step in bolstering public trust and confidence in the industry by requiring investment advisers to adopt a code of professional ethics," said SIA President Marc E. Lackritz. "SIA strongly supports both new rules and is committed to continuing to work with the regulator on reforms that will help us to better serve our clients." At today's open meeting, the commission adopted amendments to Form N-1A under the Securities Act of 1933 and the Investment Company Act of 1940, requiring open-end management investment companies to provide enhanced prospectus disclosure regarding breakpoint discounts on front-end sales loads.These changes were influenced in part by recommendations from the NASD/Industry Task Force on Breakpoints, on which SIA played an active role.SIA expressed its support for the proposal in a comment letter sent to SEC earlier this year [http://www.sia.com/2004_comment_letters/pdf/SEC02-13-04.pdf].
The commission also voted to adopt new rule 204A-1 under the Investment Advisers Act of 1940, which requires investment advisers to adopt a code of ethics establishing standards of conduct and addressing conflicts arising from personal trading by advisory professionals.In March of this year SIA filed a comment letter [http://www.sia.com/2004_comment_letters/pdf/SEC03-15-04.pdf] in support of the proposed rule.
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The Securities Industry Association, established in 1972 through the merger of the Association of Stock Exchange Firms and the Investment Banker's Association, brings together the shared interests of nearly 600 securities firms to accomplish common goals. SIA member-firms (including investment banks, broker-dealers, and mutual fund companies) are active in all U.S. and foreign markets and in all phases of corporate and public finance.According to the Bureau of Labor Statistics, the U.S. securities industry employs 780,000 individuals. Industry personnel manage the accounts of nearly 93-million investors directly and indirectly through corporate, thrift, and pension plans. In 2003, the industry generated an estimated $209 billion in domestic revenue and $278 billion in global revenues.
