Release No. 34-9503

February 29, 1972

ADOPTION OF AN AMENDMENT TO PARAGRAPH (c) OF RULE 10b-17 UNDER THE SECURITIES EXCHANGE ACT OF 1934

The Securities and Exchange Commission announced today that it has amended Rule 10b-17 (untimely announcements of record dates) under the Securities Exchange Act of 1934 ("Exchange Act") by including within the exemption in paragraph (c) of the rule securities issued by unit investment trusts which are registered with the Commission under the Investment Company Act of 1940 ("1940 Act").

Essentially, Rule 10b-17 requires issuers of publicly traded securities to furnish specified advance information concerning impending dividends or other distributions, planned splits or reverse splits, and rights or other subscription offerings to the National Association of Securities Dealers, Inc. (NASD) or an exchange on which the securities are registered and which has substantially comparable notification procedures.

Presently, paragraph (c) of the rule provides an exemption from the advance notification requirements for redeemable securities issued by open-end investment companies registered under the 1940 Act.  Primarily, this exemption was adopted because the securities of open-end investment companies are usually sold and bought (i.e. repurchased or redeemed) by the issuer, through underwriters, rather than in the market place and do not therefore present to any significant degree the problems which the rule was designed to meet.  However, a unit investment trust is not within the meaning of an "open-end investment company" as defined in the Investment Company Act of 1940.  Thus, while unit investment trusts also issue redeemable securities which have essentially the same trading characteristics as those of open-end investment companies, they do not appear to be included in the present exemptive provisions of paragraph (c) of Rule 10b-17.

As there is no regulatory purpose for treating securities issued by unit investment trusts differently than other redeemable securities issued by registered investment companies, the Commission accordingly has amended paragraph (c) of Rule 10b-17 to expand the exemption to include securities of unit investment trusts registered with the Commission under the 1940 Act.

STATUTORY BASIS

The Securities and Exchange Commission, acting pursuant to the provisions of the Securities Exchange Act of 1934, and particularly Sections 10(b) and 23(a) thereof, hereby amends paragraph (c) of Rule 10b-17 as follows (new language italics):

(c)  The provisions of this rule shall not apply, however, to redeemable securities issued by open-end investment companies and unit investment trusts registered with the Commission under the Investment Company Act of 1940.

Because the effect of the above described amendment would be to relax the notification requirements of Rule 10b-17 under the Securities Exchange Act of 1934, the Commission finds that, for good cause, the notice and procedure specified in the Administrative Procedure Act (5 U. S. C. 553) is unnecessary, and accordingly, it adopts the foregoing amendment effective immediately.

By the Commission.