SEC Company Response from Jacob Funds Inc. (CIK 0001090372) — Dec 29, 2004
Jacob Funds Inc. (CIK 0001090372)
Date: Dec. 29, 2004 · CIK: 0001090372 · Accession: 0001118378-04-000133
AI Filing Summary & Sentiment
File numbers found in text: 333-82865, 811-09447
Letter
December 29, 2004 VIA Edgar and Email ------------------- Ms. Laura Hatch Division of Investment Management Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549
Re: Jacob Internet Fund Inc. Registration Nos. 333-82865 and 811-09447
Dear Ms. Hatch:
We are responding to your comments, provided via telephone on December 9, 2004, to the Jacob Internet Fund Inc. ("Fund") Form N-CSR filing filed on November 9, 2004 and the post-effective amendment to the Fund's registration statement on Form N-1A filed pursuant to Rule 485(a) of the Securities Act of 1933, as amended, on October 29, 2004. Each of your comments and our response to each comment is set forth below.
In connection with our responses to your comments, we acknowledge, on behalf of the Fund, that:
|X| The Fund is responsible for the adequacy and accuracy of the disclosure in the filing;
|X| Staff comments or changes to disclosure in response to staff comments in the filing reviewed by the staff do not foreclose the Commission from taking any action with respect to the filing; and
|X| The Fund may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Comment on Form N-CSR ---------------------
1. In Annual Reports to Shareholders included at Item 1. on Form N-CSR, the line graph showing returns on a hypothetical investment of $10,000 should be included in table presentation with plot points.
Response: Going forward, the Fund will include a table with plot points in --------- the Fund's Edgar version of the annual report to shareholders to reflect the information contained in the line graph, which is filed with Form N-CSR.
Laura Hatch December 29, 2004 Page 2 of 3
Comments on the Fund's 485(a) Filing (filed October 29, 2004) -------------------------------------------------------------
1. The "Organization of Information" section in the General Instructions to Form N-1A provides that the information required by Items 2 and 3 should only be preceded by the cover page. The privacy policy included on the same page as the table of contents precedes the information in response to Items 2 and 3. Consider moving the privacy policy to another location within the document, perhaps after the information in response to Item 3.
Response: As discussed with the examiner during the call on December 9, --------- 2004, the Fund's goal was to maintain appropriate prominence of the privacy policy and the Fund's judgment was that Items 2 and 3 were not adversely affected by the location of the privacy policy on the same page as the table of contents. As such, and as agreed by the staff examiner, the privacy policy will retain its position.
2. The footnote on page 6 of the prospectus should not separate the Fees and Expenses table from the Annual Fund Operating Expenses table.
Response: As discussed with the examiner, the footnote will be moved to --------- appear below the "Annual Fund Operating Expenses" table, appearing directly after the "Total Annual Fund Operating Expenses."
3. On page 10 of the prospectus, consider making more clear that Ryan Jacob has been the portfolio manager of the Fund since its inception.
Response: The disclosure on page 10 will be revised to disclose that Ryan --------- Jacob has been the portfolio manager of the Fund since its inception.
4. The Fund's disclosed market timing policy did not contain an explicit statement of whether the Fund prohibited market timing and whether the Board approved policies related to market timing. In addition, the general market timing risks should be expanded to include Fund-specific risks of market timing.
Response: The "Market Timing Policy" section of the prospectus has been --------- revised to contain a statement that the Fund prohibits market timing and notes that the Board approved the policies related to market timing. In addition, the general market timing risks were expanded to include Fund-specific risks of market timing.
5. The prospectus provides that redemption proceeds from shares recently purchased by check will not be mailed until the check clears, which is usually within 12 days and no more than 15 days. Revise the disclosure to match the SEC staff position that a reasonable time for check clearing to send redemption proceeds is within 10 days.
Response: The paragraph relating to "When Redemption Proceeds Are Sent to --------- You" has been revised as requested.
Laura Hatch December 29, 2004 Page 3 of 3
6. The prospectus disclosure on pricing of portfolio securities should be expanded to include specific instances of when the Fund may use fair value procedures. In addition, the potential that the fair value determination may not match the market value of the security when the security is sold should be disclosed.
Response: The "Pricing of Fund Shares" disclosure has been revised to --------- provide some specific instances when the Fund may use fair value procedures, such as when the Fund holds portfolio securities that are traded on a foreign exchange, which closes prior to the time that the Fund sets its NAV or when the Fund holds securities that are thinly traded. The "Pricing of Fund Shares" disclosure has also been revised to disclose that that the fair value determination may not match the market value of the security when the security is sold.
7. In the prospectus disclosure of risks from portfolio turnover, given the Fund's portfolio turnover history, provide disclosure indicating that the Fund has experienced high portfolio turnover.
Response: The paragraph on "Portfolio Turnover" in the prospectus has been --------- revised to note that the Fund has historically experienced high portfolio turnover.
8. Revise the Statement of Additional Information disclosure on directed brokerage to reflect the amendments to Rule 12b-1 under the Investment Company Act of 1940.
Response: The Fund's Statement of Additional Information section "VIII. --------- Brokerage Allocation and Other Practices" has been revised to reflect the amendments to Rule 12b-1 under the Investment Company Act of 1940.
9. Clarify the language of the investment restriction regarding lending in view of the fact that the Fund is authorized to lend portfolio securities and include the percentage limits of securities lending.
Response: The Fund's investment restriction 9 regarding lending in the --------- Statement of Additional Information is revised to reflect that securities lending is not included in the fundamental investment restriction with respect to making loans and that the Fund is permitted to lend its portfolio securities, provided that the aggregate of such loans does not exceed 33% of the value of its total assets (including such loans).
Should you have any questions or concerns regarding any of the above, please contact me at (215) 564-8198 or Lucia Sitar at (215) 564-8089.
Best Regards,
/s/ Michael P. O'Hare
--------------------------
Michael P. O'Hare
cc: Ryan Jacob
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Jacob Internet Fund Correspondence Filing 12-04
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103
December 29, 2004
VIA Edgar and Email
-------------------
Ms. Laura Hatch
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Jacob Internet Fund Inc.
Registration Nos. 333-82865 and 811-09447
Dear Ms. Hatch:
We are responding to your comments, provided via telephone on December 9, 2004,
to the Jacob Internet Fund Inc. ("Fund") Form N-CSR filing filed on November 9,
2004 and the post-effective amendment to the Fund's registration statement on
Form N-1A filed pursuant to Rule 485(a) of the Securities Act of 1933, as
amended, on October 29, 2004. Each of your comments and our response to each
comment is set forth below.
In connection with our responses to your comments, we acknowledge, on behalf of
the Fund, that:
|X| The Fund is responsible for the adequacy and accuracy of the disclosure in
the filing;
|X| Staff comments or changes to disclosure in response to staff comments in
the filing reviewed by the staff do not foreclose the Commission from
taking any action with respect to the filing; and
|X| The Fund may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws
of the United States.
Comment on Form N-CSR
---------------------
1. In Annual Reports to Shareholders included at Item 1. on Form N-CSR, the
line graph showing returns on a hypothetical investment of $10,000 should
be included in table presentation with plot points.
Response: Going forward, the Fund will include a table with plot points in
---------
the Fund's Edgar version of the annual report to shareholders to reflect
the information contained in the line graph, which is filed with Form
N-CSR.
Laura Hatch
December 29, 2004
Page 2 of 3
Comments on the Fund's 485(a) Filing (filed October 29, 2004)
-------------------------------------------------------------
1. The "Organization of Information" section in the General Instructions to
Form N-1A provides that the information required by Items 2 and 3 should
only be preceded by the cover page. The privacy policy included on the same
page as the table of contents precedes the information in response to Items
2 and 3. Consider moving the privacy policy to another location within the
document, perhaps after the information in response to Item 3.
Response: As discussed with the examiner during the call on December 9,
---------
2004, the Fund's goal was to maintain appropriate prominence of the privacy
policy and the Fund's judgment was that Items 2 and 3 were not adversely
affected by the location of the privacy policy on the same page as the
table of contents. As such, and as agreed by the staff examiner, the
privacy policy will retain its position.
2. The footnote on page 6 of the prospectus should not separate the Fees and
Expenses table from the Annual Fund Operating Expenses table.
Response: As discussed with the examiner, the footnote will be moved to
---------
appear below the "Annual Fund Operating Expenses" table, appearing directly
after the "Total Annual Fund Operating Expenses."
3. On page 10 of the prospectus, consider making more clear that Ryan Jacob
has been the portfolio manager of the Fund since its inception.
Response: The disclosure on page 10 will be revised to disclose that Ryan
---------
Jacob has been the portfolio manager of the Fund since its inception.
4. The Fund's disclosed market timing policy did not contain an explicit
statement of whether the Fund prohibited market timing and whether the
Board approved policies related to market timing. In addition, the general
market timing risks should be expanded to include Fund-specific risks of
market timing.
Response: The "Market Timing Policy" section of the prospectus has been
---------
revised to contain a statement that the Fund prohibits market timing and
notes that the Board approved the policies related to market timing. In
addition, the general market timing risks were expanded to include
Fund-specific risks of market timing.
5. The prospectus provides that redemption proceeds from shares recently
purchased by check will not be mailed until the check clears, which is
usually within 12 days and no more than 15 days. Revise the disclosure to
match the SEC staff position that a reasonable time for check clearing to
send redemption proceeds is within 10 days.
Response: The paragraph relating to "When Redemption Proceeds Are Sent to
---------
You" has been revised as requested.
Laura Hatch
December 29, 2004
Page 3 of 3
6. The prospectus disclosure on pricing of portfolio securities should be
expanded to include specific instances of when the Fund may use fair value
procedures. In addition, the potential that the fair value determination
may not match the market value of the security when the security is sold
should be disclosed.
Response: The "Pricing of Fund Shares" disclosure has been revised to
---------
provide some specific instances when the Fund may use fair value
procedures, such as when the Fund holds portfolio securities that are
traded on a foreign exchange, which closes prior to the time that the Fund
sets its NAV or when the Fund holds securities that are thinly traded. The
"Pricing of Fund Shares" disclosure has also been revised to disclose that
that the fair value determination may not match the market value of the
security when the security is sold.
7. In the prospectus disclosure of risks from portfolio turnover, given the
Fund's portfolio turnover history, provide disclosure indicating that the
Fund has experienced high portfolio turnover.
Response: The paragraph on "Portfolio Turnover" in the prospectus has been
---------
revised to note that the Fund has historically experienced high portfolio
turnover.
8. Revise the Statement of Additional Information disclosure on directed
brokerage to reflect the amendments to Rule 12b-1 under the Investment
Company Act of 1940.
Response: The Fund's Statement of Additional Information section "VIII.
---------
Brokerage Allocation and Other Practices" has been revised to reflect the
amendments to Rule 12b-1 under the Investment Company Act of 1940.
9. Clarify the language of the investment restriction regarding lending in
view of the fact that the Fund is authorized to lend portfolio securities
and include the percentage limits of securities lending.
Response: The Fund's investment restriction 9 regarding lending in the
---------
Statement of Additional Information is revised to reflect that securities
lending is not included in the fundamental investment restriction with
respect to making loans and that the Fund is permitted to lend its
portfolio securities, provided that the aggregate of such loans does not
exceed 33% of the value of its total assets (including such loans).
Should you have any questions or concerns regarding any of the above, please
contact me at (215) 564-8198 or Lucia Sitar at (215) 564-8089.
Best Regards,
/s/ Michael P. O'Hare
--------------------------
Michael P. O'Hare
cc: Ryan Jacob