SR-NASD-1998-014

Proposed Rule Relating to Sales Charges and Prospectus Disclosure for Mutual Funds and Variable Contracts

NASDR has filed with the SEC a proposed rule change to amend Rule 2820 (the "Variable Contracts Rule") and Rule 2830 (the "Investment Company Rule") of the Conduct Rules of the National Association of Securities Dealers, Inc. The Investment Company Rule would be amended to: (1) provide maximum aggregate sales charge limits for fund of funds arrangements; (2) permit mutual funds to charge installment loads; (3) prohibit loads on reinvested dividends; (4) impose redemption order requirements for shares subject to contingent deferred sales loads; and (5) eliminate duplicative prospectus disclosure. The Variable Contracts Rule would be amended to eliminate the specific sales charge limitations in the rule.