PURPOSE: This rule prescribes standards for the registration of redeemable securities issued by open-end management companies (mutual funds).

Editor’s Note: The secretary of state has determined that the publication of this rule in its entirety would be unduly cumbersome or expensive. The entire text of the material referenced has been filed with the secretary of state. This material may be found at the Office of the Secretary of State or at the headquarters of the agency and is available to any interested person at a cost established by state law.

1. (1) An open-end management company (investment company) shall meet the following requirements:

   1. (A) The fundamental investment objective(s) and management policies of the investment company shall not be materially changed unless authorized by a majority vote of the outstanding securities;
   2. (B) The nonfundamental investment objective(s) and management policies of the investment company shall not be materially changed unless the shareholders of record have been given at least thirty (30) days prior written notice;
   3. (C) In addition to the disclosure required by Form N-1A of the Investment Company Act of 1940 regarding the availability of the Statement of Additional Information (SAI), a telephone number to expedite requests for the SAI shall be disclosed on the cover of the prospectus;
   4. (D) Management policies which affect five percent (5%) or more of the total assets of the investment company must be fully disclosed in the prospectus; and

   5. (E) Management policies which expose the investment company to increased risks or costs shall be prominently disclosed in the prospectus or a prospectus supplement. These policies include, but are not limited to:

      1. 1. Borrowing money (leveraging) for

investment in securities, excluding borrowing for temporary purposes;

1. 2. High annual portfolio turnover,

including purchasing securities for short-term trading;

1. 3. Short selling of securities, excluding

short selling against the box as defined in Guide 9, Form N-1A; and

1. 4. Investments in low-rated debt securi-

ties, as rated by nationally recognized rating agencies.

1. (2) An investment company that invests substantially all of its assets in another investment company or similar organizational form shall substantially comply with the North American Securities Administrator’s Association, Inc. (NASAA) Guidelines for Registration of Master Fund/Feeder Funds as adopted September 15, 1992.
2. (3) An investment company that utilizes periodic payment plans shall substantially comply with the NASAA Guidelines for Registration of Periodic Payment Plans as adopted September 29, 1993.
3. (4) An investment company that provides for telephonic purchases, redemptions or exchanges of securities shall substantially comply with the NASAA Guideline for Telephone Transactions as adopted September 29, 1993.

4. (5) In addition to the requirements of 15 CSR 30-52.010(12), the following post-effective exhibits shall be filed pursuant to 15 CSR 30- 52.300:

   1. (A) Filings pursuant to 17 CFR 230.485(a);
   2. (B) Annual Reports; and
   3. (C) Proxy statements concerning material changes to the investment objectives and management policies.

5. (6) The following post-effective exhibits are not required to be filed:

   1. (A) Filings pursuant to 17 CFR 230.485(b); and
   2. (B) Quarterly and semi-annual reports.

AUTHORITY: sections 409.306 and 409.413(a), RSMo (1986).* Original rule filed June 25, 1968, effective Aug. 1, 1968. Amended: Filed May 21, 1969, effective Aug. 1, 1969. Amended: Filed July 21, 1972, effective Aug. 1, 1972. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Amended: Filed Dec. 19, 1975, effective Dec. 31, 1975. Amended: Filed Aug. 1, 1984, effective Nov. 11, 1984. Amended: Filed Sept. 14, 1993, effective May 9, 1994. *Original authority: 409.306, RSMo (1967), amended 1977 and 409.413(a), RSMo (1967).