More info on Rule 27e-1

17cfr270 27e-1.pdf

Rule 27e-1 [17 CFR Sec. 270.27e-1] and Form N-27E-1 [17 CFR 274.127e-1]

More info on Rule 27e-1

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§ 270.27e–1

17 CFR Ch. II (4–1–06 Edition)

§ 270.27e–1 Requirements for notice to
be mailed to certain purchasers of
periodic payment plan certificates
sold subject to section 27(d) of the
Act.

FORM N–27E–1—NOTICE TO PERIODIC PAYMENT
PLAN CERTIFICATE HOLDERS OF 8 MONTHS
SURRENDER RIGHTS WITH RESPECT TO PERIODIC PAYMENT PLAN CERTIFICATES 2

(a) The notice required by section
27(e) of the Act shall be sent by first
class mail and shall be accompanied by
a written instruction sheet and a return form to be used in connection
with the exercise of the surrender right
described in the notice. No other written or graphic material may be included with such notice.
(b) In the event that regular payments throughout the first 18 months
of the plan are required less frequently
than monthly, such a notice shall be
mailed to any certificate holder who
has missed any payment or payments
equal to or greater in amount than the
amount of payments which, if missed,
would have required the mailing of a
notice if equal monthly payments had
been required during such 15- or 18month periods.
(c) Any payment not made within 31
days after it is due shall be deemed a
missed payment whether or not an
equivalent payment is made subsequently by the certificate holder.
(d) In the event any such notice is
not mailed prior to 15 days before the
expiration of the 18th month, the certificate holder shall have 15 days from
the date such notice is mailed within
which to exercise the right of surrender
described therein. Nothing herein contained shall require a second notice to
be mailed to any certificate holder who
has been mailed a notice within 30 days
following 15 months after the issuance
of his certificate.
(e) Notwithstanding the requirements of section 27(e) of the Act, no notice need be mailed to a certificate
holder if, at the time such notice would
be required to be mailed, he would not
be entitled to receive any refund of
sales loading upon surrender of his certificate.
(f) Form N–27E–1 is hereby prescribed
to inform certificate holders of their
right to surrender their certificates
pursuant to section 27(d) of the Act.
The text of Form N–27E–1 is as follows:

(Date of mailing)
Re: l(1) lll.
DEAR l(2) lll: This notice is required to
be sent to all purchasers of plan certificates
pursuant to laws administered by the U.S.
Securities and Exchange Commission. You
should read it carefully and retain it with
your financial records.
You have missed l(3) lll after your l
(4) lll plan certificate was issued. Until l
(5) lll you will be entitled to surrender
your plan certificate and receive, in addition
to the value of your account on the date
your certificate is received, a refund of that
portion of the sales charges you have paid in
excess of 15 percent of the gross payments
under your plan.
For example, if your certificate had been
received for surrender l (6) lll you would
have received a total of $llllll (7)
lll for it (the value of your account
$llllll (8) lll plus a refund of
$llllll (9) lll of the sales charges
you have paid). After your right expires you
will be entitled to receive only the value of
your account. Of course, the value of your
account will vary from day to day and by the
date your right expires it may be more or
less than it is today.
In determining whether to exercise your
right to terminate your plan, you should
consider that, while the average sales charge
deducted from your payments has amounted
to l (10) lll percent of the total payments
made, the sales charge for the remainder of
the payments under the plan, if you continue
the plan, will be l (11) llland the average
sales charge if you complete the plan will be
l (12) lll percent. Exercising your right
to terminate your plan, however, will result
in a net sales charge of 15 percent of your
total payments. Accordingly, if you believe
you may discontinue making further payments on your plan, it would probably be to
your advantage to exercise this right now.
If you wish to exercise your right to terminate your plan, you may return your certificate to l (13) lll by l (14) lll in accordance with the enclosed instructions.
Very truly yours,
l (15) lll.

IMPORTANT

FORM N–27E–1 INSTRUCTIONS
General instructions. A. The notice shall be
legible and shall be printed or typed on letter-sized paper. It shall be in modern type at
2 See the General Instructions to Form N–
27E–1 in paragraph (f) of § 270.27e–1 of this
chapter, 36 FR 13138.

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Securities and Exchange Commission

§ 270.27f–1

least as large as 10-point modern type. All
type shall be leaded at least 2 points. Parenthetical references should be completed in
accordance with the itemized instructions
below and need not be underlined or boldfaced.
B. The notice shall bear the letterhead of
the sender and the mailing date. An inconspicuous reference to the form number may
appear on the notice.
Itemized instructions. Insert the following in
the corresponding numbered spaces on Form
N–27E–1:
(1) The name of the plan and the account
number of the certificate holder. An additional internal recordkeeping reference may
also be included at the option of the sender.
(2) The name of certificate holder or an
identification
such
as
‘‘Investor’’
or
‘‘Planholder.’’
(3) Whichever of the following statements
is appropriate: ‘‘three or more payments during the first 15 months’’ or ‘‘a payment after
the 15th month.’’
(4) The name of the plan.
(5) The date of the first business day which
is 18 months from the date of the issuance of
the certificate or in the event such notice is
not mailed prior to 15 days before the expiration of the 18th month, the date of the first
business day which is 15 days from the date
such notice is mailed.
(6) A date which is not more than 2 business days prior to the date of the notice.
(7) The sum of Items 8 and 9.
(8) The value of the account payable to the
certificate holder if the certificate had been
received on the date set forth in Item 6. In
the event such certificate holder has made a
partial withdrawal in accordance with the
terms of his certificate, the notice may state
after the first sentence in the third paragraph that ‘‘The value of your account reflects the partial withdrawal which you
made previously.’’
(9) The amount as of the date set forth in
Item 6 which is equal to that part of the excess paid for sales loading which is over 15
percent of the gross payments made by the
certificate holder.
(10) Average percentage deducted for sales
charges to the date set forth in Item 6.
(11) The percentage to be deducted for sales
charges after the date set forth in Item 6.
If the holder has made less than 12 monthly payments, the following shall be substituted for the first sentence of the third
paragraph of the notice:
‘‘In determining whether to exercise your
right to terminate your plan, you should
consider that, while the sales charge deducted from your payments has amounted to
lll (10) percent of the total payments
made, the sales charge for the next lll
(11a) payments will be lll (11b) percent
and the sales charge for the remainder of the
payments will be lll (11c) percent. If you

complete the plan, the average sales charge
will be lll (12) percent.’’
(11a) The number of payments yet to be
made which are subject to the initial sales to
completion.
(11b) The percentage to be deducted from
sales charges from such payments.
(11c) The percentage to be deducted for
sales charges from all subsequent payments.
(12) Average percentage to be deducted for
sales charges from inception of the plan to
completion.
(13) Name and address of custodian bank or
other person authorized to accept surrendered certificates.
(14) Same date as in Item 5.
(15) The name of a responsible officer of the
sender, with his title.
[36 FR 13137, July 15, 1971, as amended at 36
FR 14727, Aug. 11, 1971; 37 FR 9990, May 18,
1972]

§ 270.27f–1 Notice of right of withdrawal required to be mailed to
periodic payment plan certificate
holders and exemption from section
27(f) for certain periodic payment
plan certificates.
(a) The notice and statement of
charges (notice) required by section
27(f) of the Act shall be sent by firstclass mail and shall be accompanied by
a written instruction sheet and a return form to be used in connection
with the exercise of the right of withdrawal described in the notice. Except
for a confirmation slip, the plan certificate, and any notice required by applicable State law, no other written or
graphic material may be included with
such notice.
(b) The notice may be mailed by the
issuer, the principal underwriter for, or
the depositor of, the issuer or a recordkeeping agent for the issuer if the custodian bank has delegated the mailing
of the notice to any of them or the
issuer has been permitted to operate
without a custodian bank by Commission order.
(c) Solely for purposes of section 27(f)
of the Act, the postmark date on the
envelope containing the certificate
shall determine whether a certificate
has been surrendered within the 45-day
period.
(d) Form N–27F–1 is hereby prescribed
to inform certificate holders, other
than holders of plans upon which the
amount of sales load deducted from
any payment does not exceed 9 percent
of any payment and variable annuity

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File Typeapplication/pdf
File TitleDocument
SubjectExtracted Pages
AuthorU.S. Government Printing Office
File Modified2006-06-27
File Created2006-05-17

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