# AMRICA.N PVNDB DXBTRXVTOB INC > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A8e8ee70db966bff9 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text AMRICA.N PVNDB DXBTRXVTOB INC 333 HOPE SOUTH STREET LOS ANGELES 1131 1LI.CP$40NC CALIFORNIA 00071 dee .0651 MICMAEOWNER 1989 Office of Chief of Division Securities 1450 Fifth fub1tc Counsel Investment and Exchange Street NW D.C Washington Re j4on 20540 5b Sections Act Rules Investment under Management ve1labi1itY Commission 10a and and 13k the the Securities under the 1940 the of Act Company 1940 Act of 1482 Act Act 1940 1933 of 1933 Section the 214b Act and Rule 1933 of the 214b-3 Gentlemen American Funds investment the underwriter for 22 principal Funds Investment Management Securities and literature and non-English statutes enforcement any action written materials sales consistent will with not if AFD in uses literal to that other below the sales than English AFD believes relevant terms of the language of or do of the certain languages as described the recommend Commission the Commission advertisements is request staff the Exchange Commission take this AFD Inc Distributors known as The American Funds companies collectively Group is writing to confirm that the staff of the Division that rules and Facts Persons at all who use According1 with According to the of the roughly second as significant rePrfsent population effectively 10% English such 1980 percentage it rft.en individuals census the difficult not to communicate regarding the Funds 23 million U.S nations population homes In Los Angeles spoke use English U.S residents language with or other than where AFD has its English in their principal office according to report published in The Wall Street three Journal enrolled in the students by 1992 two of every public school family where other system will come from language than English is spoken The Los Angeles public school student and comes from such population embraces more than 80 languages diverse places Macao and Mexico It would not be as Madagascar economically feasible necessary to translate to reach Fund such disparate prospoctuses groups if it were Chief Counsel Office of August 25 1989 Page Of course or sales literature English-language advertisements are accustomed non-English speaking individuals living in the U.S but are naturally more to conducting business in English dealings and are more likely to comfortable with their native language written in their native Therefore respond to material language AFD is considering developing non-English sales materials for use in U.S the distributed to the public would either Non-English sales materials be preceded or accompanied by curreAt prospectuses for the Funds and 10a of the 1933 Act offered to Sections being pursuant or qualify as tombstones pursuant to Rule 13k under the 1933 Act or qualify as omitting prospectuses pursuant to Rule 182 under the 1933 Act Only English-language prospectuses would be in connection with Each available non-English sales materials prominent legend piece of non-English sales material would bear 5b to the effect that the prospectuses in the only invest or send available are should not of prospectuses the non-English Additionally all under 156 Potential for .the language Funds and being offered potential money without understanding sales materials including requirements the 1933 Act applicable Rule English the would also antifraud investors the content conform to provisions further who receiving non-English sales materials understand an English-language prospectus would be protected by the fact that shares of the Funds are sold through securities of investors not might requirements dealers related to who are subject to numerous protection including Article III Association of Securities Dealers Rules investor Section of the National of Fair Practice which states pertinent part that sale or exthnge of eny purchase member shall have reasonable for believing security grounds for the customer.. that the recommendation is suitable Emphasis recommending to custoier in the supplied Discussion Non-English Sales Materials Accompanied or Preceded by Prospectus AFD requests confirmation that the staff would not recommend that action if an English-language prospectus of the Commission take delivered to potential investors Fund were pursuant to Sections 5b and 10a of materials for that the 1933 Fund Act along with non-English sales Chief Counsel Office of August 25 1989 Page confirmed to the Franklin Group of Funds that it no-action position under Section 24b of the 19110 sales material Act see below with respect to audio-taped to intended for distribution along with written prospectus the Materials blind and visually impaired provided persons staff The has would take given the accurate i.e to whom the Materials representation audience of the products the Materials misleading presentation may ac.cc ed under the No-Action Letter in Rule Funds not their pre are misleading forth are to whether respect SEC are presented provide an by Franklin being offered with and the Materials 156 Act 1933 available or may not be ri .LiE sat -th tLe See Franklin 26 February of Group 1987 the letter Franklin for example Chinese-language sales delivering an English-language prospectus to native is analogous to delivering audio-taped Chinese-language speakers sales literature with written prospectus to blind and along AFD believes literature that with along visually impaired has daily business Of individuals the Further discussed above as course conditLons contained in the eFi inends population foreign to written English and must exposure in that language even if they do not to conduct its fluently it read adhere the to Fra.iklin letter Pursuant Non-English Sales_Materini.s_Used to Rules and 1311 482 confirmation that the staff would not recommend for Commission take action if non-English sales materials were delivered to investors to either Rule 134 or pursuant AFD also that the Fund requests Rule 482 would be when Although the en only availaLle to only dealt Ly tha tff equally to materials used materials qualified under pursuant ccni Franklin English-language investois English-language for that with material fund letter those to Rules rules sales siios are 134 and designed 1182 to since offer the prospectus Non-English Sales Rule prospectus such Materials Filed Pursuant to Section 214b and 24b-3 AFD requests confirmation that the staff would not recommend that action if non-English sales materials used the Commission take are filed pursuant to Section with English-language prospecttses 24b of the 19110 Act arid Rule 211b-3 thereunder Chief Counsel Office of August 25 1989 Page The staff in respect to blind and of the the the Franklin filing of letthr audio-taped visually impaired 1940 in Act As this presented the Franklin letter is material individuals above we believe analogous to the discussed letter no-action position with to be used with pursuant to Section 24b took the issue issue presented in based on the facts and representations request that it that the staff provide confirmation letter will not recommend that the Commission take action as requested at 213/486-9425 if you need further Please call the undersigned direct We respectfully contained in or have information Very truly yours 4htsL Michael this any tL Downer questions OC11E Our Ref American RESPONSE DIVISION OF THE OFFICE OF INVESTMENT No 89-527-CC Funds Distributors OF CHIEF COUNSEL MANAGEMENT File No Inc 13 2-3 that Your letter of August 25 1989 requests our assurance enforcement take Commission any that the we would not recommend the action against American Fund Distributors Inc if Funds Group principal underwriter for The American in the U.S materials sales non-English language AFD distributes or preceded by an English language that are accompanied of the and 10a with Sections in accordance prospectus 134 or under Rule and Securities Act of 1933 1933 is prospectus of the 1933 Act when only an English language 482 would not we that available You also seek our confirmation sales action if nonEnglish language enforcement recommend filed under are materials used with English language prospectuses of 1940 Acttt Act 1940 of the Investment Company Section 24b and Rule 24b-3 thereunder AFD Funds Act 5b second language You state that persons who use English as significant percentage or do not use English at all represent to difficult is therefore and it of the U.S population the Funds individuals regarding with such communicate effectively sales or advertisements when distributing English language literature Further you state that non-English speaking to individuals living in the U.S are more likely to respond order to In language material written in their native with these individuals you propose to communicate effectively sales include legend on each piece of nonEnglish language are for the Funds material indicatiig that prospectuses investors should not available only in English and potential the content of the understanding invest or send money without that your request is analogous to the You believe prospectus no-action request made by the Franklin Group of Funds pub avail Feb 26 1987 the Franklin letter in which the staff However we are unwilling to extend granted noaction relief taken in the Franklin letter to AFDs distribution the position We believe of nonEnglish sales literature and advertisements would not In the Franklin letter the staff stated that it under the Commission action to recommend any enforcement Franklin Group of Funds Section 24b of the 1940 Act if the audio of taped transcript filed three copies of in connection the funds be used to by materials advertising with the sale of fund shares to blind and visually-impaired prospectus supply Franklin stated that it would persons sales materials the either or would accompany that precede statement disclosing The sales materials were to include statement advising and of prospectus the availability review the carefully prospectus to investors prospective its is reconsidering staff currently The before investing position in the Franklin letter sales literature or advertisements in that if AFD distributes in the same language language other than English prospectus should be readily available For the reasons stated above we that the are unable to assure you that we would not recommend Commission take any enforcement action if AFD proceeds as described in your letter LQ Carol jj Peebles Attorney 21 For if AFD distributes sales literature in other than and an language English English language either precedes or accompanies such sales prospectus the sales literature should state that literature in the is available same prospectus language upon request and investors should review prospectus prospective before investing carefully example believe is not inconsistent with Investment our position June 23 1970 discussing the Company Act Rel No 6082 of the federal securities laws to the offer applicability shares outside the and sale of open-end investment company stated that in which the Commission prospectus used in any foreign country should be printed in language by that segment of the foreign public readily understood which may or may not be the native being solicited language of the country While AFD is not distributing prospectuses in foreign country it proposes to solicit segment of be the public whose native language may not English We U.S --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A8e8ee70db966bff9. Public record. Not legal advice.