Earlier this month, NASD Regulation proposed a rule change which would give mutual fund companies more flexibility with regard to related performance' information in fund advertisements, according to Cindy Fornelli, senior advisor to the director of the division of investment management of the Securities and Exchange Commission. While the SEC supports the proposed changes, it would still like to see changes in the rules regarding manager performance, Fornelli said. NASD Regulation is a subsidiary of the National Association of Securities Dealers of Washington, D.C.

Related manager performance - performance information not strictly about the fund in question - became an issue in 1996 when the SEC released what has become known as the "Bramwell" no-action letter. Elizabeth Bramwell was the portfolio manager of the Gabelli Growth Fund, which had yielded impressive returns. When Bramwell left that fund, she started her own fund and asked the SEC if she could include her previous performance in the new fund's prospectus. The commission effectively granted the request in releasing what is known as a "no-action letter" to Bramwell.

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