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News September 19, 2005 Issue

SEC Allows Advisers, Funds to Wait on Gulf Coast Mailings

If you are required to make your annual Form ADV offer in September, October, or November, you can hold off on mailing the offer letter to your Katrina-affected clients until November 28, 2005 or when mail resumes being delivered to their area, whichever is first.

Or, you can go ahead and mail the offer letters out now.

Thatís the upshot of exemptive relief issued last week by the SEC to advisers, funds, and other registrants wondering what to do about mailing disclosure documents into the Gulf Coast.

As pertains to the investment management industry, the relief applies to advisersí mailings of annual Form ADV offers under Rule 204-3(c), as well as investment companiesí mailing of annual and semi-annual reports, proxy statements, and prospectuses.

The relief only applies to mailings going to clients whose mailing address for delivery, as listed in the adviserís or fundís records, has a zip code for which the U.S. Postal Service has suspended mail service as a result of Hurricane Katrina (see the U.S. Postal Service website for an Excel download of affected zip codes). The relief applies only if the type or class of mail customarily used by the adviser or fund to deliver the required disclosure is affected. So, for example, if Express mail has been suspended, but first-class mail, which your firm typically uses to mail ADV offers, is still running smoothly, you need to get those offer letters out. Firms relying on the relief still must respond to investorsí requests for the information within the 90-day exemptive period.

The relief is optional: thereís no obligation to scrub your mailing lists for Katrina-affected zip codes.