The NASD Mutual Fund Task Force (“Task Force”) recently issued its report, dated November 11, 2004, on “Soft Dollars and Portfolio Transaction Costs” (“Report”). NASD formed the Task Force (which is comprised of senior executives of broker-dealers and mutual fund management companies, as well as representatives from the academic and legal communities) in May 2004 "to consider ways to improve the transparency of mutual fund portfolio transaction costs and distribution arrangements." This Report sets forth the Task Force’s observations and recommendations concerning “soft dollar” services and portfolio transaction costs. In a forthcoming report, the Task Force will focus on distribution arrangements, including fees paid pursuant to Rule 12b-1 under the Investment Company Act of 1940 (“1940 Act”), and "revenue sharing."

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