Collective Investment Funds

Advertising Restriction – 9.18(b)(7)

A bank may not advertise or publicize an A1 fund except in connection with advertising the general fiduciary services of the bank. This prohibition is intended to ensure that banks operate A1 funds in compliance with the ’40 Act’s exclusion of A1 funds from the definition of an investment company. Section 3(c)(3) of the ’40 Act restricts both the advertising of these A1 funds and the offering of these funds to the general public. There is no similar prohibition on advertising with respect to A2 funds that operate within the parameters in section 3(c)(11) of the ’40 Act.

The OCC has cautioned national banks that the antifraud provisions of the securities laws apply to both A1 and A2 funds. The OCC recommends that banks conform any advertisement of their A2 funds to SEC and NASD guidance to avoid a potential securities law violation. When advertising their A2 funds, banks should be particularly wary of making projections of future performance, providing unsubstantiated historical performance data, or using language that suggests the bank will guarantee or ensure a fund’s future performance.

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