On October 29, 2004, the SEC issued a Notice seeking public comment on a proposal by the NASD to amend NASD Conduct Rule 2830(k), which governs members’ execution of investment company portfolio transactions. NASD is proposing to eliminate a current provision of this rule that allows a member to sell shares of a fund that has a disclosed policy of considering sales of fund shares as a factor in selecting brokers to execute fund portfolio transactions, and to add a new provision to the rule to effectively prohibit this type of "directed brokerage" activity. Before the NASD proposal can become final, the SEC must approve the change. Comments on the proposal are due by the end of November. (Release No. 34-50611; Notice of Filing of Proposed Rule Change by National Association of Securities Dealers, Inc. Relating to Investment Company Portfolio Transactions; http://www.sec.gov/rules/sro/nasd/34-50611.pdf.)

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