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SEC No Action Letter on Presentation of Performance Information for Mutual Fund Spinoff

Janus Advisers, August 28, 2000

By John M. Baker, Esq.

The SEC’s Division of Investment Management recently issued a no-action letter on the presentation of performance information for series formed by spin-off from a different investment company. Janus Advisers Series, SEC No-Action Letter (Aug. 28, 2000).

In order to increase the types of investors who could invest, Janus Aspen Series plans to spin off the Retirement Shares classes of ten different funds into a new series investment company, Janus Adviser Series. Although technically a new investment company, the new funds will be substantially the same as the old funds, except for the elimination of restrictions on potential investors.

The new funds sought to use the performance history of the old Retirement Classes as their own. Normally a fund’s standardized performance information may include performance only for periods after the effective date of the fund’s registration statement.

The SEC staff agreed that it would not recommend enforcement action if the new funds include standardized performance information in each fund’s registration statement, advertisements or sales literature, or includes required Form N-1A performance information in its prospectus that includes performance information of the old funds prior to the date the new funds’ registration statement becomes effective.

The staff stated that this position is limited solely to the spin-off of an entire class of an existing registered fund and does not address the use of performance information by a fund that is formed by carving out a portion of a predecessor class.

I have put the Janus Advisers Series letter on the eGroups web site in Word 97 format, and it may be accessed at http://www.egroups.com/files/fundlaw/

Copyright 2000, John M. Baker, Esq., Stradley, Ronon, Stevens & Young, LLP, 1220 19th Street, N.W., Suite 700, Washington, DC 20036 – (202) 822-9611- Fax (202) 822-0140 This article was originally posted to the FundLaw List, http://www.egroups.com/group/fundlaw. To subscribe to FundLaw, send a blank e-mail to fundlaw-subscribe@egroups.com

Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.  

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